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Published on Wednesday, October 21, 2020

Cathay to shed a quarter of workforce






 


Cathay Pacific is to close its Cathay Dragon subsidiary immediately and axe 8,500 positions despite a £3.9 billion bailout from the Hong Kong government in June.

It isn't yet clear how many jobs , if any, will be lost in the UK. The airline has confirmed that 5,300 jobs will be axed in Hong Kong and 600 will be cut overseas.

A further 2,400 roles are currently unfulfilled due to a hiring freeze and the closure of some overseas operations.

The job losses account for around 24% of Cathay Pacific's total staff.

Cathay Dragon was a full-service regional airline flying mostly from Hong Kong to mainland China and other destinations in Asia.

Cathay says it hopes to continue operating most of Cathay Dragon's routes, which will be taken over by its budget airline Hong Kong Express.

"What we need to do is focus our efforts on a single premium full-service carrier brand, which will be Cathay Pacific, complemented by a single low-cost leisure brand in Hong Kong express," said Cathay Pacific Chairman Patrick Healy.

Cathay's restructure will cost $284m, but the airline said it will cut its costs by $64m a month next year.

As part of cost-cutting measures, the airline is asking its Hong Kong-based cabin and flight crew to agree to changes in their employment conditions 'to match remuneration more closely to productivity'.

The airline is planning to operate only half its usual capacity next year.

"This crisis is deeper, and the road to recovery slower and more patchy than anyone thought possible just a few months ago," added Mr Healy.

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