Cathay Pacific to shed 600 jobs in major revamp

Cathay Pacific Airways, the largest international airline in Asia, announced in a statement on Monday that it is to shed 600 jobs, including 190 management positions, in the carrier’s largest restructuring for 20 years. The job losses do not affect pilots or cabin crew, should be complete by the end of the year, and will also see the restructuring of its cargo arm with the removal of the cargo director.
The news follows on from the carrier having suffered its first loss in eight years, having struggled to compete with low-cost carriers, Middle East airlines such as Emirates, and Chinese operators. Part of the loss has also been attributable to a fuel-hedging strategy that did not pay off. According to Andrew Lee, an analyst at Jefferies in Hong Kong, “Everyone is becoming more and more cost conscious. To be able to survive, they need to control costs. I think it is a start.”
Shares in the airline rose 2.3 percent on the news, and they have performed well over the year, having gained 14 percent. 190 managerial positions will be involved in the job cuts, which represents 25 percent of the carrier’s management. An additional 200 jobs, mostly from junior ranks, will also be cut. Cathay Pacific is targeting savings of about 30 percent through these staff cost cuts at its headquarters. An official at Air China, a 30 percent stakeholder in Cathay Pacific, indicated back in March that the carrier is aiming to cut costs by more than HK$4 billion (US$514 million) over three years.