released October 27, 2020

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Hong Kong's Cathay Pacific Airways Ltd said on Wednesday it would cut 5,900 jobs and end its regional Cathay Dragon brand as it grapples with a plunge in demand from the coronavirus pandemic.
Overall, it will cut 8,500 positions, or 24 percent of its normal headcount, but that includes 2,600 roles currently unfilled due to cost reduction initiatives, Cathay said.
Cathay Dragon will "cease its operations with effect from Wednesday" and will seek regulatory approval for a majority of its routes to be operated by Cathay Pacific Airways and the city's one-and-only low-cost carrier HK Express. Cathay Pacific Airways completed its acquisition of HK Express in July last year.
The restructuring will cost HK$2.2 billion (US$283.9 million) and the airline will also seek changes in conditions in its contracts with cabin crew and pilots, it told the stock exchange.
"The actions we have announced today, however unpalatable, are absolutely necessary to bring cash burn down to more sustainable levels," Cathay Chairman Patrick Healy told reporters.
"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 Chief Executive Augustus Tang said in a statement.
Hong Kong's Financial Secretary Paul Chan Mo-po said in a statement two government observers on Cathay Group's board had reminded the group's management of the need to keep the impact to employees and society to the minimum in restructuring its business. He also said Cathay Group had been asked to ensure that it was well equipped to start off again after the epidemic and to provide impetus for the local aviation industry as well as Hong Kong's economy.
The International Air Transport Association expects it will take until 2024 for passenger traffic to recover to pre-COVID-levels.
The airline, which has stored around 40 percent of its fleet outside Hong Kong, said on Monday it planned to operate less than 50 percent of its pre-pandemic capacity in 2021.
After receiving a US$5 billion rescue package led by the Hong Kong government in June, it had been conducting a strategic review that analysts expected would result in major job losses because it has been bleeding HK$1.5 billion to HK$2 billion of cash a month.


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