In its continued efforts to counter the aviation demand downturn amid the COVID-19 pandemic this year, Cathay Pacific is folding its Cathay Dragon brand and reducing its workforce.
According to a release from the Hong Kong-based carrier, the airline will be ceasing operations of its regional subsidiary Cathay Dragon immediately. Regulatory approval will be sought for the routes operated by Cathay Dragon to be shifted to Cathay Pacific and budget subsidiary HK Express.
Along with folding the Cathay Dragon brand, the airline group will also reduce approximately 24% of its global workforce – around 8,500 positions. The airline added it has been able to reduce the number of jobs affected to around 5,900 citing natural attrition and a freeze in recruitment.
The airline also announced Hong Kong-based cabin crew and pilots will be asked to agree to changes to their conditions of services, and executive pay will be cut through 2021. Salaries will not be raised next year and the airline will introduce a third voluntary Special Leave Scheme for non-flying employees during the first half of next year.
The airline is also deferring new aircraft deliveries, suspending non-essential spending, and suspending non-essential spending.
In a statement, Cathay Pacific CEO Augustus Tang stated that despite the airline group's efforts, the airline is spending HKD $1.5-2 billion per month. The airline measures are intended to reduce this amount to HKD $500 million. Cathay Pacific plans to operate at 25% of its passenger capacity during the first half of 2021, and 50% for the entire next year.
Regarding the cuts, Tang stated: “Our immediate priority is to support those affected by today’s announcement. We are deeply saddened to part ways with our talented and respected colleagues, and I want to thank them for their hard work, achievements and dedication.”
Cathay Pacific is offering severance packages and extending assistance for affected employees.
As the airline continues to survive amid the pandemic and aviation demand downturn, Tang further affirmed the Cathay Pacific group's commitment to Hong Kong and its aviation industry: “Whilst this is a difficult time, we are a resilient Group and a proud Hong Kong brand. I believe in this plan and I know we will prevail. We remain absolutely confident in the long-term future of Cathay Pacific, the Hong Kong aviation hub and the critical role Hong Kong will play in the Greater Bay Area and beyond.”