Cathay Pacific cites virus, cuts 8,500 airline jobs

HONG KONG — Hong Kong airline Cathay Pacific Airways said Wednesday that it would cut 8,500 jobs and shut a regional airline as it grapples with the plunge in air travel due to the coronavirus pandemic.

About 5,300 employees based in Hong Kong and another 600 elsewhere will likely lose their jobs, and 2,600 unfilled positions will be cut. The reductions are about 24% of the company’s workforce, Cathay Pacific said.

“The global pandemic continues to have a devastating impact on aviation and the hard truth is we must fundamentally restructure the group to survive,” Cathay

Pacific CEO Augustus Tang said in a statement.

The company said it will also shut Cathay Dragon, its regional airline unit. It will seek regulatory approval for most of the routes to be operated by Cathay Pacific and its budget airlines subsidiary HK Express.

The restructuring is aimed at reducing Cathay Pacific’s cash burn from $258 million to $193.5 million a month, the company said. The plan will cost about $283.8 million, it said.

Executive pay cuts will continue throughout 2021 and there will be no pay increments nor bonuses for all Hong Kong employees, Cathay Pacific said. Ground staff will be offered a voluntary leave plan in the first half of next year.

Cathay Pacific Airways Chairman Patrick Healy estimated that passenger levels will only return to pre-pandemic levels in 2024. “The future remains highly uncertain. This crisis is deeper and the road to recovery slower and more patchy than anyone thought possible just a few short months ago,” he said.

Healy said Cathay Pacific is more affected than its peers as the airline is “100% reliant on cross-border travel,” much of which has stopped as passengers remain wary of flying amid travel restrictions. Major destinations such as mainland China and other countries have temporarily closed their borders to visitors.

Cathay Pacific will be operating at less than 25% of capacity for the first half of 2021.