The new crown pneumonia epidemic caused an avalanche decline in airline performance that 8,500 employees layoffs. Cathay Pacific Group announced today (21) its corporate restructuring plan, which will affect 8,500 employees, accounting for approximately 24% of the total. The group’s Cathay Dragon also announced its immediate suspension In operation, Cathay Pacific Airways pessimistically predicts that passenger capacity in 2021 will be less than 50%.
The Cathay Pacific Group stated that corporate restructuring is to protect the company’s future development. The entire group is expected to cut 8,500 employees, accounting for about 24% of the total. Through freezing recruitment and voluntary resignation, the current number of employees has been reduced by about 5,900, including 5,300. Hong Kong employees and 600 non-Hong Kong employees.
The Cathay Pacific Group pointed out that its wholly-owned company “Cathay Dragon Airways” will immediately cease operations, and most of the routes will be taken over by Cathay Pacific and Hong Kong Express. At the same time, it also requires flight attendants and pilots to modify their working conditions to achieve close salary For the goals of productivity and enhancing market competitiveness, all employees will not receive a salary increase in 2021, nor will they receive 2020 year-end bonuses.
Cathay Pacific 8,500 peoples layoffs
Deng Jianrong, Cathay Pacific’s chief executive officer, said that the epidemic has swept the world and continued to deal a heavy blow to the aviation industry. A fundamental reorganization must be carried out, otherwise, the group will eventually be unable to continue operations. Affected employees will provide a resignation plan that exceeds the legal requirements. Furthermore, extend the period of medical benefits and employee air ticket discounts, as well as counselling and work transition support services.
Deng Jianrong pointed out that the group has taken measures such as reducing flights, delaying the delivery of new aircraft, suspending non-essential expenses, freezing recruitment, implementing salary cuts for senior management, and arranging two rounds of special vacation plans. However, Cathay Pacific still consumes 1.5 billion to 2 billion yuan per month. Hong Kong dollar cash will be unsustainable in the long run. After the announcement of the layoff plan, it will reduce the monthly expenses by 500 million Hong Kong dollars.
Deng Jianrong estimated that, based on what we have seen so far, the pace of market recovery will obviously be quite slow. The company expects that the passenger transport capacity in the first half of 2021 will still be much lower than 25% in 2019. In addition, passenger transport capacity in 2021 will be below 50%.
Moreover, Cathay Pacific has 132 passenger planes, which mainly operate long-distance flights in global cities; Cathay Dragon Airlines has 48 planes, which mainly fly to mainland China and other regions. Data shows that Cathay Pacific and its subsidiary Cathay Dragon carried a total of 47,000 passengers in September. A 98% drop from the same period in 2019. The daily passenger capacity is only 1,568, which is quite different from the previous approximately 100,000.
Hong Kong-based Cathay Pacific was the first to bear the brunt. According to a report by Hong Kong media “Hong Kong 01” today, Cathay Pacific. Dragonair previously abandoned their application for the second round of employment guarantee programs.
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