Cathay Pacific asks 27,000 employees to take unpaid leave

Cathay Pacific asked all of its 27,000-strong workforce to take three weeks of unpaid leave in the next few months, as geopolitical events have severely dented the Hong Kong-based airline’s demand in recent weeks.

The city-wide Hong Kong protests that have been going on since March 2019 and the break-out of the novel coronavirus (nCoV) that has negatively affected the global travel demand from and to China, have also negatively impacted Cathay Pacific. 

The airline is amidst a turnaround plan, initiated in 2017 and previously set to end at the end of 2019. The company is yet to issue its FY2019 financial results.

Cathay Pacific was already forced to cut capacity by over 30%, the carrier announced on February 4, 2020, due to “the Novel Coronavirus outbreak and also a significant drop in market demand,” an airline spokesperson indicated.

However, to protect its business, the carrier initiated its Special Leave Scheme (SLS). Cathay Pacific is “appealing to all employees” to participate in the scheme, which will start on March 1 and end on June 30, 2020.

“All employees will have the option to take three weeks of unpaid leave in this period,” confirmed the airline’s representative.

Previously, SLS was used in 2003 due to the Severe Acute Respiratory Syndrome (SARS) outbreak and in 2009, during the peak of the global financial crisis.

While the financial situation at Cathay Pacific is yet to be revealed by the company, the cumulative passenger numbers for 2019 were released on January 16, 2020. In total, the airline carried 35.2 million passengers in 2019, a shortfall of 0.7% compared to 2018, despite an increase in capacity of 5.1%, measured in Available Seat Kilometers (ASK).

“As previously reported, our second-half performance will be significantly below that of the first half. We anticipate 2020 will continue to present us with a highly challenging operating environment,” said the company’s Chief Customer and Commercial Officer, Ronald Lam at the time.

In light of the protests and the worrying situation with the outbreak of nCoV, Cathay Pacific is reducing overall capacity by 1.4% in 2020, despite initial plans to grow by 3.1%, indicated Lam.


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