No Return For Cathay Dragon: Group Chairman

The chairman of the Cathay Pacific group Patrick Healy said there's no chance that the Cathay Dragon brand will ever return even if market conditions improve in future, but he also said the group's other businesses are safe, at least for now.

Cathay Dragon stopped all operations on Wednesday as part of a HK$2.2 billion restructuring by the group that will see more than 5,000 locally based staff made redundant and other workers asked to accept new terms of service.

Healy said the company will in future focus all of its resources on the full-service Cathay Pacific and its recently acquired low-cost carrier HK Express.

"The combination of those operational and marketing efficiencies are quite substantial and it’s very important for us to realise those savings and efficiencies as we create a more focused, more efficient and more competitive airline group," he said in an online press conference.

"It’s safe to say that we won’t sadly be seeing the return of the Cathay Dragon brand."

He said management is confident that the revamp will help Cathay survive the Covid-19 pandemic crisis, and it won't need to seek further funding after a government-led bailout in June.

"The balance sheet at the moment is strong, our liquidity is solid and our gearing is low," Healy said, adding that the group also has no plans to sell its other businesses like catering and Asia Miles.

On the sacking of thousands of staff, he said the loss-making carrier came to the decisions reluctantly but it’s necessary to ensure its future.

"Nothing would give us greater pleasure then to be able to hire back the people we are losing today when we return to growth in the future," Healy said.

Cabin and cockpit crew who managed to keep their jobs will be asked to sign a new contract that will see a reduction of base pay and allowances, though Cathay said the package is still "attractive and highly competitive" by industrial standards.