Coronavirus crisis: Cathay Pacific axes 8,500 jobs to survive
The move follows the shutdown of operations by Cathay Dragon, a regional subsidiary. At least 5,300 people will lose their jobs in Hong Kong. Despite government help, the airline loses 219 million euros a month. 43 air carriers have ceased operations since the outbreak of the pandemic.
Hong Kong (AsiaNews / Agencies) - Cathay Pacific is cutting 8,500 jobs to save the main city air carrier, hit hard by the effects of the coronavirus pandemic. The announcement was made today by the company's top management.
The cut affects about a quarter of the group's employees and will come through the immediate grounding of Cathay Dragon, a subsidiary that operates regional flights. At least 5,300 people will lose their jobs in Hong Kong; 600 abroad, while the remaining jobs were vacant.
Last year, Cathay Pacific carried over 35 million passengers, producing profits of 107 billion local dollars (HKD, equal to 12.2 billion euros): until the end of 2021 it will operate at half its capacity at most. To limit losses, the city government set up a HKD $ 40 billion (€ 4.9 billion) bailout fund in June.
The company has also tried to reduce expenses by postponing the purchase of new planes, introducing a special leave scheme for employees and reducing manager compensation. Despite this, it continues to lose € 219 million per month.
The airline industry was immediately thrown into crisis in February, after the vast majority of countries closed the skies and cut foreign travel to contain the spread of Covid-19. According to data from Cirium, an air transport analysis company, 43 airlines have closed down since the outbreak of the pandemic emergency in January; many others are in crisis and have restructuring projects underway.
According to the International Air Transport Organization, traffic will not return to the levels reached in 2019 until at least 2024.
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