Cathay Faces A 'life-or-death' Situation: Paul Chan

The Financial Secretary, Paul Chan, on Wednesday said the government had asked Cathay Pacific to make sure it is "well equipped to start off again after the epidemic", and had urged the airline to keep the impact of its mass layoffs to a minimum.

In a statement responding to Cathay's axing of 8,500 positions and its subsidiary Cathay Dragon, Chan noted that the airline was facing "unprecedented operational and financial pressure", despite the government's investment of HK$27 billion in June.

"If this life-or-death issue is not properly addressed, the situation would harm Hong Kong's international aviation hub status and development in the region, and adversely impact other local economic activities to the detriment of the overall interests of Hong Kong," he said.

"As a matter of fact, the business environment has been made very difficult for the aviation industry by the epidemic around the globe in the past six months or so. In spite of support from their governments or state funds, many major international airlines have inevitably resorted to downsizing or business restructuring to lower costs."

Chan said two observers appointed by him to Cathay's board had reminded the firm's management of the need to keep the impact of its restructuring on employees and society to a minimum.

"As the supervisory body, the Transport and Housing Bureau has already required the Cathay Group, in adjusting its operation mode and scale, to fully consider the potential impact on Hong Kong’s status as an international aviation hub and the aviation network, and to ensure that the Group is well equipped to start off again after the epidemic and provide impetus for the relaunch of the local aviation industry as well as Hong Kong’s overall economy," he said.