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Cathay Pacific layoffs Dragonair suspends operations in Hong Kong's aviation industry but cannot shrink


The Cathay Pacific Group announced on Wednesday (21st) that it will lay off approximately 5,300 Hong Kong employees in the next few weeks, and its Cathay Dragon Airways will cease operations on the same day. Layoffs and suspension of operations by leading local airlines are not only commercial decisions.

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Written by: Commentary Editing Room

2020-10-21 17:53

Last update date: 2020-10-21 17:53

The Cathay Pacific Group announced on Wednesday (21st) that it will lay off approximately 5,300 Hong Kong employees in the next few weeks, and its Cathay Dragon Airways will cease operations on the same day.

The layoffs and suspension of operations by leading local airlines are not only commercial decisions, but also a blow to Hong Kong's continued status as an international aviation hub.

The government must try to revitalize the aviation industry after the epidemic, by preserving air routes and coordinating flights.

Since announcing that it will not apply for the second round of the government's "Ensure Employment" program, it has been estimated that Cathay Pacific will lay off employees, and the company officially announced on Wednesday.

More than 5,000 employees lost their jobs, which affected the livelihoods of more than 5,000 families.

Taking into account overseas departments and the positions that have been deleted, the number of layoffs reached 8,500. The impact is far-reaching.

At the industry level, the end of the company's Cathay Dragon Airways, which mainly traveled to and from the Mainland, also marked the end of a 35-year-old company.

Cathay Pacific and Dragonair had previously given up on applying for the second round of employment protection plan, which was accused of paving the way for layoffs.

(Photo by Yuan Shu)

Hong Kong Dragon Palm Mainland and short-distance multiple routes

Hong Kong is an international aviation hub. Before the epidemic, there were a large number of direct and connecting passengers traveling between the mainland and Hong Kong, Hong Kong and overseas every day.

In 2019, there were 71.54 million passengers at the local airport, nearly half of which were carried by Cathay Pacific and Cathay Pacific. The importance is beyond doubt.

Dragonair holds a number of main routes to and from the mainland, including Beijing, Shanghai, Nanjing, and many other routes to and from Taiwan, Japan, South Korea, India, and Southeast Asian countries.

The next question is where will Dragonair's route go.

Cathay Pacific said it intends to seek regulatory approval to retain most of Dragonair's routes.

First of all, the government stands in Hong Kong's interest and has enough routes to attract domestic and foreign passengers to choose Hong Kong as a base when it recovers after the epidemic. Therefore, Hong Kong routes should be retained as much as possible.

Dragonair is a subsidiary of Cathay Pacific, and Cathay Pacific is still the leading local airline. It has the most complete aircraft maintenance, catering, and staff training facilities, and is most capable of undertaking Dragonair routes.

But at the same time, the government should welcome other airlines to enter the market, open up new destinations, and improve services through inter-company competition.

Having said that, the route arrangement requires the approval of the civil aviation authority of the other side, and the mainland is the main destination of Dragonair. The attitude of the National Civil Aviation Administration becomes important.

In fact, news of Cathay Pacific’s merger with Dragonair has already been reported, but "Reuters" has quoted sources as saying that the National Civil Aviation Administration believes that Cathay Pacific’s takeover of Dragonair’s route is equivalent to expanding its fleet, and because of Hong Kong’s legislative turmoil, the bureau has advised Cathay Pacific The issue of "missing scores" allowed the regulatory authorities to refuse Cathay Pacific's opening of destinations and expansion of its fleet for 12 months. There is a chance that the restructuring plan may not be carried out before the end of this year.

The news is not true to the stakeholders, but it is certain that Beijing has considerable power to decide on the routes of Dragonair's mainland.

The Hong Kong government should coordinate in this regard and determine who the route will fall on as soon as possible.




The freight industry can become a growth point

While stabilizing the situation of Cathay Pacific, the Hong Kong government must also coordinate flight points and flights with the four major airports in Guangdong and Macao, open up more destinations, promote competition and maintain cooperation, and establish an airport cluster in the Greater Bay Area.

The society focuses on passenger aviation, but Hong Kong has always been a cargo aviation hub.

In terms of cargo volume, Hong Kong's cargo shipping volume this year is less than that of 2018, but the number of cargo aircraft taking off and landing in the first nine months of this year has surpassed 2018 and 2019, which proves the airport's shipping status.

Both Cathay Pacific, the Airport Authority and the Hong Kong Government must seize the opportunity to promote air cargo transportation to further attract cargo planes to Hong Kong, such as reducing parking fees and relaxing aircraft parking time restrictions to facilitate long-distance flight crew rest and help airlines support their operations.

As the Financial Secretary Chen Maobo said, if the issue of Cathay Pacific’s survival is not properly handled, it will harm Hong Kong's status and development as an international aviation hub in the region, and it will also harm the overall interests of Hong Kong.

The competitiveness of the local aviation industry can only be enhanced by maintaining air traffic rights and transforming and developing.

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【Greater Bay Area Aviation.

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Source: hk1

All news articles on 2020-10-21

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