Cathay Pacific layoffs | Scholars urge the government to think about policies to promote Hong Kong's positioning as an international aviation hub

Political situation

Written by: Chen Chuolan

2020-10-31 11:53

Last update date: 2020-10-31 11:53

Cathay Pacific Airways announced major layoffs last week, and the "surviving" crew members will need to sign a new contract with significantly reduced salaries and benefits by next Wednesday (November 4).

Yuan Zhile, deputy director of the Aviation Policy Research Center of CUHK, stated in the Hong Kong and Taiwan program "Hong Kong Letters" today (31st) that the global aviation industry has come to a standstill under the influence of the epidemic. In addition to emergency rescue plans, the government should also seriously consider how policies should be coordinated and Promote the development of the aviation industry and promote the positioning of Hong Kong as an international aviation hub. The industry should also use technology to improve operational efficiency and save costs.

Cathay Pacific announced major layoffs last week, and the surviving crew members are required to sign a new contract with a significant reduction in salaries and benefits before next Wednesday (November 4). Those who do not sign will be fired.

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Yuan Zhile pointed out that in the past ten years or so, I have heard many comments criticizing Cathay Pacific, saying that it is not as good as before, its service level is declining, and it is inferior to other competitors. It faces the challenges brought by low-cost airlines. In addition, local governments promote open skies policies. Signing of two-party or even multi-party aviation agreements provides passengers with more choices, which makes the competition among airlines more fierce, and Cathay Pacific's operations become more difficult.

In addition, the new crown pneumonia also has an impact on the global aviation industry. Yuan Zhile pointed out that according to the International Air Transport Association (IATA), the global aviation industry will lose nearly HK$600 billion in cash in the second half of 2020, with only 8.5 months of funds remaining on average. The volume is expected to recover at least in 2024.

Local governments have launched different emergency rescue plans to save the local aviation industry in order to help the aviation industry survive the epidemic. However, the Hong Kong government should take advantage of the current situation and consider how policies can coordinate and promote the development of the aviation industry and promote the positioning of Hong Kong as an international aviation hub. The industry should also use technology to improve operational efficiency and save costs, provide passengers with a better flying experience, respond to the new normal, and enhance competitiveness.

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