Hong Kong’s Cathay shares drop after job loss announcement
HONG KONG: Shares in Cathay Pacific fell yesterday after the airline announced a major restructuring programme that would see jobs axed, in the face of losses and intense competition.
Analysts said investors were disappointed by the lack of detail in the plan described by Hong Kong’s flag carrier as its biggest shake-up in 20 years.
Stocks were down 4.6 per cent mid-morning at HK$ 10.30.
An increase in lower cost airlines in the region and the expansion of other premium operators, as well as global economic headwinds, has put pressure on Cathay.
“The changing and increasing customer expectations, the dramatic growth of competition, the unpredictable nature of the world economy and a host of other factors have combined to put huge pressure on our business,” Cathay said in a statement.
The airline said it needed to build a ‘leaner, simpler structure’ and would reorganise ‘starting from the top’.
“This change will create opportunities, but some jobs will no longer be needed. Some new jobs will be created and other jobs may be redefined,” Cathay said.
There were no further details on how many jobs would go.
The new strategy would include focusing on customer service, improving efficiency and keeping costs down, the airline said. — AFP