New Delhi: Ten months into the pandemic and the world is still reeling under its effect. Grappling with the fall in air travel due to the COVID-19 pandemic, Hong Kong airline Cathay Pacific Airways on Wednesday announced to cut 8,500 jobs and shut a regional airline. Also Read - Goa Travel in COVID Times: Tourists to be Photographed if Not Wearing a Mask
Around 5,300 employees in Hong Kong and another 600 elsewhere are likely to lose their jobs, and 2,600 unfilled positions will be cut. The cuts are about 24 per cent of the company’s workforce, Cathay Pacific said in a statement. The company will also shut down Cathay Dragon, its regional airline unit, with operations ceasing from Wednesday. Also Read - Gujarat Govt Slashes RT-PCR Test Price to Rs 800 Amid Covid Surge
It will seek regulatory approval for most of the routes to be operated by Cathay Pacific and its budget airlines subsidiary HK Express. The restructuring is aimed at reducing Cathay Pacific’s cash burn to 500 million Hong Kong dollars (USD 64.5 million) a month, from about 1.5 billion Hong Kong dollars (USD 193.5 million) to 2 billion Hong Kong (USD 258 million) dollars currently, Cathay Pacific CEO Augustus Tang said in a statement. Also Read - Lewis Hamilton Tests Positive For COVID-19, Mercedes Driver to Miss Sakhir Grand Prix
“The global pandemic continues to have a devastating impact on aviation and the hard truth is we must fundamentally restructure the Group to survive,” Tang said.
“We have to do this to protect as many jobs as possible, and meet our responsibilities to the Hong Kong aviation hub and our customers. The restructuring plan will cost about 2.2 billion Hong Kong dollars (USD 283.8 million),” he said.
Executive pay cuts will also continue throughout 2021 and there will be no pay increments for 2021 nor bonuses for this year for all Hong Kong employees, the company said. Ground staff will also be offered a voluntary leave plan in the first half of next year.
In June, Cathay Pacific raised 39 billion Hong Kong dollars (USD 5 billion) in a recapitalization plan that gave the city’s government a stake of about 6 per cent in the airline.