Cathay Pacific responds to layoffs: "difficult but necessary decisions" must be made

Financial News

Written by: Lin Leqian

2020-08-12 18:00

Cathay Pacific (0293) suffered a half-year loss of nearly 9.9 billion yuan. During the period, the number of employees decreased by 1,200 to 33,000. In response to the layoffs at the performance meeting, Chairman Patrick Healy said that the new crown pneumonia epidemic has brought unprecedented challenges to the company. He said frankly that passenger transportation will not recover significantly in the future. Currently, it "burns" about 1.5 billion yuan per month. Throttling measures are not enough. The group must maintain a sustainable and healthy financial situation. Restructuring is a "difficult but necessary decision". The most appropriate future operation scale and model will be proposed in the fourth quarter of the board of directors. The results of the review are currently discussed. It's too early to say.

Cathay Pacific officially completed its capital restructuring plan today and assessed that operating cash is sufficient to meet the current requirements for at least 12 months. He Yili added that the group’s recent recovery has been very slow. The capacity has been adjusted to 8% in August and September. Whether there will be more flights and destinations after October will depend on travel restrictions. I believe it may rise to double digits. At present, one third of the flights are parked in Australia. The short-term situation is still very difficult, and the situation in the second half of the year may be worse than the first half.

Hong Kong Express is a "new weapon" and does not rule out any possibility

Asked if Cathay Dragon will reorganize and incorporate Cathay Pacific or HK Express brands, He Yili said that Hong Kong Express is the group’s "new weapon" and is optimistic about the prospects of full-service and low-cost airline services, but has not yet made any reorganization. Any decision will not rule out any possibility. In addition, he did not respond to whether the conflict between China and the United States would affect the group's business, only that the reduction of geopolitical risks is good for the global aviation industry.

In terms of freight, Cathay Pacific Chief Executive Officer Deng Jianrong said that due to the imbalance between supply and demand in the freight market, freight business revenue hit a record high in May. Although it has fallen in June, the freight business is expected to maintain strong performance in the second half of the year. When asked whether mainland passengers would resume connecting flights in Hong Kong, he said that he has not received relevant information. If the information is true, the group will welcome it very much.

It is reported that the Greater Bay Airlines (Greater Bay Airlines) under the wealthy mainland businessman Huang Chubiao has applied for a license from the Civil Aviation Department. Its opponents are more than 100 airlines entering and leaving Hong Kong.

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Cathay Pacific Hong Kong Express