The Cathay Pacific Group has announced it is ceasing operations of its regional subsidiary Cathay Dragon and cutting 5,900 jobs as part a restructuring plan that will allow it to “secure its future.”
The Hong Kong-based airline group has also revealed that it expects to operate under half of its overall pre-COVID-19 capacity in 2021.
The group said it would cut approximately 8,500 positions, but thanks to “a recruitment freeze and natural attrition,” the actual number of jobs lost would be around 5,900, or 17 percent of the company’s employees.
Cathay Dragon will cease operations immediately. The group says it will seek regulatory approval to operate the majority of Cathay Dragon’s routes under its other airlines Cathay Pacific and HK Express.
“The global pandemic continues to have a devastating impact on aviation and the hard truth is we must fundamentally restructure the group to survive,” said Cathay Pacific chief executive officer Augustus Tang.
“We have taken every possible action to avoid job losses up to this point,” Tang said. “But in spite of these efforts, we continue to burn HK$1.5 to 2 billion cash ($200 to $260 million) per month. This is simply unsustainable. The changes announced today will reduce our cash burn by about HK$500 million ($65 million) per month,” he added.