[New crown pneumonia] Cathay Pacific or large-scale layoffs, the government will stand by?

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Written by: Commentary Editing Room

2020-09-17 16:00

Last update date: 2020-09-17 16:00

The global aviation industry is in an ice age, and Cathay Pacific’s passenger capacity dropped by nearly 99% year-on-year last month.

In this business dilemma, Cathay Pacific gave up applying for the government's second round of employment protection plan. Obviously, it does not want to be attached to the government's assistance and affect its business restructuring plan.

As one of the largest employers in Hong Kong, Cathay Pacific’s business decisions often involve the livelihoods of more than a thousand people. Even if the government cannot intervene, it has the responsibility to minimize the shock of layoffs.

Affected by the epidemic prevention measures of various countries, Cathay Pacific announced on Monday (14th) that the number of passengers in the previous month was only over 35,000, a year-on-year drop of 98.8%. Its customer and commercial president Lin Shaobo said frankly, "... As the market adjusts to the new normal, the group will not survive in the end.” Since Cathay Pacific still spends 1.5 billion to 2 billion yuan in cash each month, economic recovery seems to be indefinite, and structural restructuring is inevitable.

Most of the restructuring involves increasing revenue and reducing expenditure, and reducing expenditure is inseparable from cost reduction. Therefore, many people also expect that Cathay Pacific’s refusal to apply for government subsidies is to save the company’s layoff plan.

Wang Simin, chairman of the Cathay Pacific Air Services Staff Union, believes that the company explained to the union that the above decision is to retain flexibility when the new business policy is announced in the final quarter. Therefore, it is expected that frontline flight attendants and ground crews will bear the brunt of the layoff plan.

Since the epidemic, the international aviation industry has been hit hard. The picture shows the Hong Kong International Airport.

(Data Picture/Photo by Luo Guohui)

The impact of layoffs is not shallow, the government should reduce shocks

Although the current economic crisis is a business decision, Cathay Pacific, as one of the largest employers in Hong Kong, has its own social responsibilities that must be taken into account.

Cathay Pacific currently employs more than 33,000 employees worldwide, of which more than 27,000 are based in Hong Kong.

If the number of layoffs is as much as one-third of the total manpower, as rumored in the market, as many as 8,000 people will lose their jobs.

However, Cathay Pacific and its subsidiaries have received 500 million yuan in public funds to subsidize salaries and wages in the first phase of the employment guarantee plan. In the second round of unpaid leave launched by the company earlier, the participation rate was as high as 90%, which shows that employees Also willing to overcome difficulties with the company.

Now that the unpaid leave of employees has not yet ended, the government's curse has been loosened, and Cathay Pacific’s layoff plan has been rampant. It is understandable even if employees are dissatisfied.

Cathay Pacific froze its manpower from June to August and has already complied with the requirements of the Employment Guarantee Program. If the layoffs involve a large number of people, the government cannot sit idly by.

After the government used the land fund to inject 27.3 billion yuan into Cathay Pacific in June, it appointed Tang Jiacheng and Yuan Guoqiang as observers of the group's board of directors. Although neither of them has the right to vote at the board meeting, they can at least help the government lobby Cathay Pacific to secure employment. importance.

For example, since the airport "berth fee" collected by the AA is the main cost of airlines, the government and the AA may also consider temporarily collecting berth fees to induce Cathay Pacific to reduce the scale of layoffs to a minimum; The layoff plan is postponed for half a year to give employees more room to find a way out.

If Cathay Pacific announces large-scale layoffs, I believe it is expected from all walks of life that the government should provide more support to workers outside of the enterprise as soon as possible.

In addition to organizing career fairs and letting the Labour Department take the initiative to follow up on employee compensation matters, it is more important to use public funds appropriately to create job opportunities.

Just as the French government, fearing that domestic jobs will be greatly reduced due to the epidemic, the French government launched the "France Restart" plan earlier this month, spending more than 100 billion euros, hoping to save the job market and create 160,000 new jobs next year , Xiazhong’s goal is not only to stabilize the job market, but also to boost the competitiveness of French companies in new energy, agriculture, ecological transformation, etc., and promote long-term economic restructuring. Therefore, even if the Hong Kong government fails to help Cathay Pacific employees retain positions , Nor can we stand idly by and let the tide of unemployment and even possible domino effects ferment.

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