 |
Cathay Pacific is cutting 8,500 jobs, mostly in Hong Kong
|
The news of Cathay Pacific cutting 8,500 jobs was a huge bombshell today, but to be expected, considering the airline does not expect flying volume to recover until the second half of 2021.
 |
The airline does not see recovery until mid-2021
|
This means Cathay Dragon (formerly Dragon Air) is immediately shut down, with 2,000 cabin crew and 550 pilots affected. Another 4,000 cabin crew, 600 pilots and 700 ground crew will be made redundant, mostly in Hong Kong.
Cathay Dragon flew 48 aircraft to 51 destinations, 23 of which were on the Chinese mainland, about 370 flights per week to China.
The massive cuts are the airline's HK$2.2 billion (US$284 million) bid to restructure the company despite getting HK$39 billion in a bailout in June and a HK$27.3 billion injection from the Hong Kong government to keep the airline going during the pandemic.
Chairman Patrick Healy made the announcement today, apologizing for the "great distress and anxiety", but that the company had done everything it could to avoid the cuts, and they had to be made to "secure the survival of this incredible 74-year-old company".
 |
Healy said cuts were a bid to keep airline alive
|
He said Cathay Dragon was being sacrificed so that the company could focus on creating a "world-leading travel brand in Cathay Pacific", and a single "low-cost leisure brand in Hong Kong Express".
The chairman said the decision to part ways with "such a large number of our outstanding colleagues is heart-wrenching... and nothing would give us greater pleasure than to be able to hire back the people we are losing today when we return to growth in the future".
It's a terrible and difficult decision to make, but it had to be done. However, aviation experts say Cathay should have made these cuts much earlier like other airlines to stop bleeding cash and stay as lean as possible. For example back in August, British Airways cut 12,000 jobs and reduced wages.
Nevertheless, many flight attendants have moved on to other jobs. I heard last night from a friend that his Cathay friends have gotten jobs in hotels or restaurants, or are selling insurance.
 |
Some flight crew have already changed careers
|
All these people have had great training and would be a good asset to any hospitality business, if they can take on any more staff.
Most flight attendants know their job was not forever, but announcement this will be harder for pilots to stomach, who have a specialized skill and were used to being paid well, between HK$3 million to HK$4.5 million.
Of those who are retained, they will have a week to decide if they want to continue working for Cathay, and if they do, will have to accept much lower packages by 40 to 60 percent than they are used to, putting them in line with Singapore Airlines.
It's tough times for everyone, and the airline industry is bearing the brunt of the effects of the coronavirus pandemic, with Cathay's passenger numbers in September plunging 98.1 percent from the same month last year.
The pandemic has been especially hard for Cathay and Singapore Airlines, which don't have any domestic routes, which is why last week's announcement of a travel bubble between Hong Kong and Singapore was welcomed.
 |
Cathay Dragon (right) has ceased operations
|
Cathay's announcement will also have a knock-on affect other industries tied to the airline, such as suppliers for catering, companies that produce in-flight magazines and other printed materials, cleaners, drivers who ferried flight crews, and of course the tourism industry.
It's a massive shakeup but it needed to be done. Other industries need to look at how they can be as lean as possible too. Everyone has to play survival of the fittest, which will surely affect people's mental health and well being.
But remember: we are all in this together. And for some, this change will be good.