Cathay Pacific Likely To Announce Job Cuts, Fewer Flights
This week, Cathay Pacific is expected to release the results of a review on its operations, and it is likely they will announce job cuts, cost reductions, and the possibility of adding more flights to its short-haul arm. Cathay Pacific is struggling as competition from Chinese airlines increases, leaving Cathay Pacific to make tough choices in an attempt to keep themselves competitive.
According to Reuters,
The 71-year-old Hong Kong airline is under pressure to combat aggressive state-supported mainland carriers, and to position itself against an “open skies” deal signed last month between China and Australia.
Cathay scrapped its second-half profit forecast in October and announced a review of its business. The December edition of Cathay’s staff magazine, seen by Reuters, reported Chief Executive Ivan Chu would unveil the results on Jan. 18.
Cathay declined to comment on the details of its review.
“The new management direction has to look past market share gains,” said Will Horton, a Hong Kong-based analyst for aviation consultancy CAPA. “That hasn’t been profitable and will become more competitive. It is well past time to get serious on costs.”
Cathay’s share price has tumbled to its lowest level since the depths of the global financial crisis in 2009, and none of the 18 analysts polled by Thomson Reuters have a “buy” recommendation on the stock.
Cathay Pacific is Asia’s largest international airlines, but the airline has lost billions in fuel hedging and has a significant amount of employees that lead to redundancies is work flows. The announcement this week will attempt to deal with both of those problems.
The announcement is expected this week with a group of 350 management team members.