MIAMI – Hong Kong-based Cathay Pacific (CX) will be eliminating over 6,000 jobs, as well as its regional brand Cathay Dragon (KA), according to South China Morning Post. An official announcement is expected on Wednesday, as the airline completes restructuring plans.
CX was the recipient of a US$5bn government-led bailout in early June, after record losses of US$1.2bn in Q1 and Q2 2020. These measures helped prevent major layoffs despite the current economic climate.
The Asian market continues to struggle with the fallout of the COVID-19 pandemic, as travel restrictions and health concerns have caused massive reductions in demand.
The Future of Cathay Dragon
KA, which mainly operates short-haul flights to mainland China, has an all-Airbus fleet of 35 aircraft. This includes 18 Airbus A330-300’s, some of which are ‘second-hand’ aircraft from CX. The future of these aircraft is uncertain, although it is expected CX will absorb the fleet of primarily short-haul aircraft.
KA had placed an order for 16 Airbus A320neo for delivery in 2023, but the status of this order is now in limbo.
Under the restructuring plan, CX will absorb the 3,000 staff currently employed by KA.
“It’s unnecessary to keep the two brands given the dire financial situation, but Cathay will not give up flying to mainland destinations,” a source close to South China Morning Post said. “The carrier will not give up the mainland market and it will maintain its major role in the regional aviation hub.”
Moving Forward for Cathay Pacific
Despite the current conditions, CX has prevented major layoffs up until this month. Experts believe the airline will still be operating at a labor surplus through next year, assuming demand rebounds to pre-pandemic levels in 2022.
On Monday, CX announced it would be operating at half-capacity in 2021. That said, sources close to the airline worry that this restructuring plan will not guarantee a secure future.
“In principle, the restructuring should be done in one go. But the carrier cannot rule out future cuts if the pandemic is still not under control or vaccine productions are delayed.”
More details will be available when an official announcement is made.
Featured Image: CX Airbus A350-1000. PHOTO: Luca Flores/Airways Magazine