Cathay To Forgo Subsidy, Clears Way For Firings

Cathay Pacific and Cathay Dragon said on Friday that they won't be applying for the second round of the government's subsidy scheme, which will pave the way for the two major airlines in Hong Kong to reduce staff.

In a statement, Cathay's general manager for corporate affairs Andy Wong said the operating environment remains extremely challenging and it's inevitable that it will need to "right-size" the carriers to address the reduced travel market.

However, he said some of the Cathay group's subsidiaries, such as Hong Kong Express and Cathay Pacific Catering Services, will be applying to the scheme – which will cover wages between September and November.

The firms who are given the subsidy will have to guarantee there is no reduction of headcount.

"We continue to make decisions based on the long-term interests of the company and the Hong Kong aviation hub, to protect our future and as many people as possible. We will share more details on our plans when available," said Wong.

The chairwoman of the Confederation of Trade Unions, Carol Ng, has called on the management to offer the best possible redundancy package to its staff should it decide to fire them.

Cathay’s chairman Patrick Healy had earlier warned that “tough decisions will need to be made” by the fourth quarter of this year.

In June, the SAR government stepped in with a significant capital injection for the beleaguered carrier, which has been hard hit by the coronavirus outbreak.

Airlines across the world have been struggling to stay afloat as travel restrictions imposed due to the coronavirus pandemic decimate the travel and tourism sectors.

Australia's Qantas said in June that it expected to sack 6,000 staff and outsourced its Australian ground handling operations last month. Singapore Airlines said on Thursday that it would cut 4,300 positions, or around 20 percent of its staff.

Cathay, which posted a loss of HK$9.87 billion in the first half of this year, has already implemented pay cuts and voluntary leave schemes for employees.