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Cathay Pacific layoffs | The labor gap is more than 800, and the annual salary of air crew is more than 3 million. 5 sets of figures look at the prosperity and decline

2020-10-21T05:30:57.121Z

The new type of pneumonia epidemic has raged around the world. Many places have been "closed" for more than a month. The tourism industry is close to freezing, and the aviation industry has also suffered a serious setback. Cathay Pacific has repeatedly reported layoffs recently. Cathay Pacific finally issued a notice this morning, announcing that



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Written by: Chen Jiahui

2020-10-21 13:20

Last update date: 2020-10-21 13:25

The new type of pneumonia epidemic has raged around the world. Many places have been "closed" for more than a month. The tourism industry is close to freezing, and the aviation industry has also suffered a severe setback. Cathay Pacific has repeatedly reported layoffs recently. Cathay Pacific finally issued a notice this morning announcing its restructuring plan. Cut 8,500 positions.

Among the 8,500 positions, about 5,300 employees in Hong Kong will be laid off in the next few weeks.

Cathay Pacific is the largest airline in Hong Kong. However, its passenger traffic has plummeted by 98% following the "closing of customs" in various places. However, its basic operating costs are high. It currently burns at least 1.5 billion yuan a month. The government previously spent 27.3 billion yuan to "rescue the nation." ".

In the face of losses, Cathay Pacific often chooses to lay off employees "conditionally", but employees are not the biggest expense.

The following sets of figures are used to see why Cathay Pacific has laid off its employees again, how the income of its employees is "gap between the rich and the poor", what is the biggest expenditure, and whether the earlier capital injection is enough to "suffer" the global passenger transport recovery.

1. 812 air crews have an annual salary of over 3 million

Recently, Cathay Pacific has been rumored to be layoffs. Cathay Pacific and Dragonair did not apply for the second round of the "Employment Protection" plan earlier, which is suspected of paving the way for layoffs.

Cathay Pacific Annual Report 2019

In the face of losses, Cathay Pacific often chooses to lay off employees "conditionally", but employees are not the biggest expense.

Looking at Cathay Pacific’s operating expenses in 2019, the staff expenses of Cathay Pacific and Dragonair were 17.6 billion yuan, which was less than the 28.8 billion fuel and related expenses.

However, most of the routes were suspended due to the epidemic, and fuel consumption was reduced accordingly.

In fact, Cathay Pacific has previously laid off large-scale employees due to losses caused by fuel hedging failures. In 2017, it cut 600 people at once.

Employee income ``disparity between the rich and the poor'' The annual salary of air crews exceeds 5 million yuan

Looking at Cathay Pacific’s 2019 annual report, Cathay Pacific and Dragonair have nearly 30,000 employees, of which aircrews account for the majority, with more than 18,000. Among the aircrews, most of them have an annual salary of less than 1 million yuan and an annual salary of more than 1 million yuan. There are more than 3,000 people with an annual salary of more than 5 million, and one with an annual salary of 5.5 million to 6 million. The income of employees can be described as "the gap between the rich and the poor."

In the early years, the Cathay Pacific pilot team mainly used foreign pilots, and only recently absorbed local pilots. The salary and benefits of newly recruited pilots were revised the previous year, and part of the salary and bonuses will be linked to the number of flight hours, and the income of newly recruited local pilots Compared with before, the annual salary is about 500,000 yuan.

As for flight attendants, online information shows that the monthly salary is about 30,000 yuan.

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2. Impact of the epidemic: more than 200 waypoints vs. 26 waypoints

For Hong Kong people, one of the advantages of Cathay Pacific is that it has many direct flights.

Cathay Pacific and its subsidiaries such as Dragonair and Express have a total of 119 direct destinations around the world, and there are 255 if you add the joint flights.

For comparison, Cathay Pacific’s main competitor, Singapore Airlines, which also focuses on international routes, and its airlines have a total of 136 direct flights.

▼Cathay Pacific destination changes before and after the epidemic▼

With the new pneumonia epidemic sweeping the world, various places have been "closed off". Cathay Pacific, which only operates international routes, is particularly affected.

At present, most of the waypoints in China are temporarily suspended, and there are only 26 waypoints still in operation in October and November.

▼Extended reading of Cathay Pacific's history series▼

A review of Cathay Pacific’s history once lost its blue-chip status as the world’s best speculator

Farewell to Dragonair, Cathay Pacific finally withdraws its brand after 14 years of whale

3. Flights: a sharp drop from more than 200 flights per day to more than 30 flights

According to the monthly traffic figures released by Cathay Pacific, in 2019 before the epidemic hit, Cathay Pacific's monthly flight volume reached 6,000 to 7,000 flights, and now it has dropped to more than 1,000 flights per month, that is, more than 200 flights per day. About 30 classes.

As for the number of passengers carried per month, it also dropped from about 2.4 million to more than 30,000, a 98% drop year-on-year.

Freight volume rises month-on-month and plummets nearly 40% year-on-year

Cathay Pacific said earlier that it will convert some passenger aircraft into "passenger-cargo aircraft" to meet freight demand.

In September this year, Cathay Pacific’s cargo volume increased by about 7% on a month-to-month basis, but it was still worse than the level before the epidemic. Cathay Pacific’s cargo volume in September this year was about 110,000 metric tons, a sharp drop from the September 2019 cargo and mail volume exceeding 170,000 metric tons. 36.6%.

In addition, in the past, Cathay Pacific's passenger and cargo operation revenue ratio was about 1:3. Even if the passenger traffic declined slightly, it rose slightly on a monthly basis, and it was still difficult to offset the passenger loss.

4. The government invests 27.3 billion in air rights to save Cathay Pacific

The waypoint is the right of way.

In the middle of this year, Financial Secretary Chen Maobo announced the government's decision to invest in Cathay Pacific through a land fund, involving 27.3 billion yuan. He also used the protection of traffic rights as the basis for funding. He pointed out that it would not be a good thing to transfer traffic rights to airlines in other countries or regions.

People familiar with the aviation industry said that it is not easy to re-negotiate air rights. In addition to discussing airline-related matters, it is also necessary to discuss the local office, whether it can drive the local economy, and how many local employees to hire. Each has more consideration. The situation is similar to the current situation of the Hong Kong government discussing tourism bubbles with other places, and the progress is slow.” The opening of new routes generally takes at least three years, including internal research, consultation with the civil aviation authorities of the two places, and then marketing. .

5. The global recovery begins in 2024, it is estimated that Cathay Pacific will still "burn" 57 billion

The International Air Transport Association (IATA) predicts that global air passenger traffic will return to pre-epidemic levels by 2024 at the earliest. Cathay Pacific CEO Deng Jianrong said in an interview with "Hong Kong 01" earlier that Cathay Pacific recorded at least 1.5 billion yuan per month. Net cash outflow.

Based on this rough estimate, before Cathay Pacific announces a new round of reorganization on October 21, it will still need to "burn" 57 billion yuan (1.5 billion yuan per month multiplied by 38 months) to maintain operations until global air passenger transport recovers.

With the support of the government earlier, Cathay Pacific completed a capital restructuring plan of up to 39 billion yuan, but an additional 18 billion yuan was needed to survive until 2024.

Cathay Pacific Chief Executive Deng Jianrong said in an interview with "Hong Kong 01" earlier that a net cash outflow of 1.5 billion to 2 billion yuan was recorded every month.

(Photo by Gong Jiasheng/Picture of Profile)

Cathay Pacific Customer and Commercial President Lin Shaobo recently stated that it is expected to operate less than a quarter of the normal passenger capacity in the first half of next year. The most optimistic scenario is that the market will gradually recover in the second half of next year. However, this prediction is based on the effectiveness of the vaccine under development. And can be based on the assumptions widely adopted in major markets in the summer of 2021.

01News

Cathay Pacific 01 Data

Source: hk1

All news articles on 2020-10-21

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