The financially-beleaguered Hong Kong Airlines has confirmed another round of job cuts as nearly two-third of its employees have been made redundant or required to take a significant pay cut to keep their jobs. The HNA Group-owned airlines made an official announcement where it said some 700 Hong Kong-based and overseas employees were made redundant commencing yesterday. Affected employees will be compensated according to their conditions of service and in compliance with local labour laws.
Senior management will receive a pay cut as high as 36%, up from the current 15%, between June and December this year, depending on job grade. The South China Morning Post reported that a new pilot contract was also introduced as their basic pay will be cut by 20%, while the guarantee on the number of paid hours per month will also be removed, in addition to the extended unpaid leave. According to HK01, the airline has decided to keep only about 100 flight attendants and the majority of them are flight pursers and senior pursers.
Asked about how the marketing department of the airline will be affected, Hong Kong Airlines did not answer the question. The company said, "Hong Kong Airlines is in a critical survival mode. To secure our future, it is imperative for us to transform into a leaner and more efficient organsation now to ensure that we can continue to operate sustainably in the challenging years ahead."
In December last year, the airline cut 250 flight attendant jobs after reducing a total of 400 positions across various departments in February 2020. Also, SCMP reported that Hong Kong Airlines would move out of its headquarters in Tung Chung to its training centre at Hong Kong International Airport to save some costs.
Apart from the job cuts, Hong Kong airlines announced last week that its subsidiary Hong Kong Aviation Ground Service will cease operation from 1 July onwards with 240 employees being be made redundant. Hong Kong Airlines said it was looking for a new service provider to support its limited passenger flight to ensure that its airport services will remain uninterrupted.
Earlier this month, the airline is also reportedly planning to ground its fleet of Airbus A320s to focus on cargo operations. It will deploy eight of its 21 Airbus A330s on cargo routes. After the restructure, the airline will be operating a fleet 80% smaller than before the pandemic began.
Earlier this month, it was reported that the brand would be merging departments and and job responsibilities. Once positioned itself as a rival for Cathay Pacific, Hong Kong Airlines has been struggling financially even before the pandemic as last year’s challenges placed additional stress on the airline. In late 2019, the Transport and Housing Bureau of the Hong Kong SAR government, in conjunction with the Civil Aviation Department, met with the airline's management team and concluded that the airline had to take measures to protect the interests of passengers and staff.
Meanwhile Cathay Pacific is reportedly planning to rebrand into a new business model that offers a wide range of products apart from just selling air tickets, according to a report. A report from the South China Morning Post said Hong Kong's flag carrier is planning to reposition itself and adopt an "Amazon concept" that includes many businesses under the brand. Under the new plan, Cathay Pacific will become just one of the brands within the Cathay ecosystem. It's reported that the senior management of the company has likened the plan to that of AirAsia, which offers a wide variety of businesses including food delivery, online groceries as well as health and insurance segments. Previously, the company rolled out an ad that shows multiple lifestyle items via email to its customers.
In that email, the company said that it is "always searching for new ways to help you move forward in style – to connect you with people, places and experiences that matter."
It concluded with a statement: We're going to elevate the Cathay experience you know and love into a lifestyle experience that will add to your pleasure and enjoyment. The ad ends with the name "Cathay" with "Pacific", sparking speculation over an imminent rebrand.