Cathay Pacific to forgo wage support, opening doors for layoffs
Cathay (0293) Pacific airlines announced on Friday that it will no longer apply for employment subsidies from the government for its main business. The move implies that the airline can further make redundancies at its companies.
Yet, Cathay (0293) Pacific has filed applications for some of its subsidiaries, such as Hong Kong Express, Hong Kong Airlines, Cargo Terminal, Hong Kong Airport Services, and Cathay (0293) Pacific Catering Services. The financial support protects jobs for the September-November period.
Cathay (0293) Pacific has so far received US$5 billion in relief support from the Hong Kong government and has thus avoided major layoffs. Still, the group has warned that it is reviewing all aspects of its business model and expects to see the results in Q4.
Cathay (0293) Pacific, which had about 27,000 staff worldwide at the end of last year, has cut about 400 overseas crew members and offered voluntary redundancies.
The airline's general manager said the airline will inevitably adjust its fleet to cope with a shrinking travel market. Earlier in July, the airline group had the plan to park one-third of its fleet in Alice Spring, Australia. And according to the South China Morning Post, it is now considering to revise the number and store even more aircraft.
On Thursday, Singapore Airlines (SIA1) (SINGY) announced a 20 percent reduction in its workforce, while Qantas Airways also reported a 30 percent reduction in its workforce. Like Singapore Airlines (SIA1) (SINGY), Cathay (0293) Pacific's primary focus is on international routes, and it lacks sufficient support in the domestic market.
Hong Kong Airlines, the subsidiary of Cathay (0293) Pacific, indicated that its passenger numbers for August and September will be 8% of normal, despite strong demand for cargo.
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