Cathay Pacific Group, the owner of Hong Kong flag carrier Cathay Pacific, is cutting 5,900 jobs across its global workforce in a bid to stay afloat, the company said Wednesday.
Cathay is just one of many airlines across the world that have been decimated by the Covid-19 pandemic, as anti-epidemic measures have forced travelers to stay home.
The company said it would shutter its regional carrier, Cathay Dragon, and lay off 5,300 employees based in Hong Kong. About 600 employees based outside of Hong Kong are likely to be affected "subject to local regulatory requirements," the company said in a statement.
“We have taken every possible action to avoid job losses up to this point. We have scaled back capacity to match demand, deferred new aircraft deliveries, suspended non-essential spend, implemented a recruitment freeze, executive pay cuts and two rounds of Special Leave Schemes," Cathay Pacific chief executive officer Augustus Tang said.
Tang said that in spite of these efforts, the company was burning through up to 2 billion Hong Kong dollars (about $260 million) in cash each month, which was "simply unsustainable."
He said the changes announced today would reduce those expenditures by about 500 million Hong Kong dollars ($65 million) per month.
Tang said Cathay expects to operate at just 25% of its 2019 capacity in the first half of next year, and less than 50% for the entirety of 2021.