Cathay Pacific Airways is expected to announce job cuts, cost reductions and to shift flights to its short-haul arm later this week, as some analysts say the company will report a full-year loss for 2017, its first since 2010, Reuters reports.
The airline is expected to announce the job cuts during the presentation of review results this Wednesday. Reportedly, Cathay will have to reduce its 33,700 workforce as part of cost reductions.
Competition from mainland carriers and the lower cost Hong Kong Airlines has put pressure on ticket prices, while Cathay’s costs have risen due to the strength of the Hong Kong dollar against the Chinese yuan, Reuters writes.
Lower cost hometown rival Hong Kong Airlines is also expanding rapidly to destinations served by Cathay.
Cathay does not have a low-cost arm, and costs at its short-haul carrier Cathay Dragon are nearly as high as those at the parent, said one source with knowledge of the situation who was not authorised to speak publicly about the matter.
Last November, Dragonair was officially rebranded as Cathay Dragon.
Cathay will make “the right long-term decisions” in preparation of a “challenging and competitive environment coming up”, chief operating officer Rupert Hogg told the South China Morning Post. He added that the company will “rethink its workforce” and mentioned reassigning staff and redundancies as options.
Cathay isn’t the only airline that has been struggling. Last year, Australian airline Qantas reported record annual profit results, but only after cutting 5,000 jobs over a three-year period. The transformation programme left many employees with less hours, working on a casual basis, or no longer employed at all.
After turning its finances around as a result of the cuts, the company awarded extra cash bonuses of up to HK$17,734 for 25,000 non-executive staff.