(Reuters) – Hong Kong’s Cathay Pacific Airways Ltd <0293.HK> will cut around 6,000 jobs, or 18% of its workforce, and axe regional brand Cathay Dragon to help it weather the coronavirus pandemic, the South China Morning Post reported on Tuesday, citing sources.
The airline said in June it was reviewing its strategy in light of the travel downturn, with “tough decisions” to be announced during the fourth quarter and analysts expected it would announce major job cuts.
That month the Hong Kong government also led a $5 billion rescue package for the airline, which has been burning through around HK$1.5 billion ($193.55 million) to HK$2 billion of cash a month.
The South China Morning Post said the airline was expected to announce the job cuts on Wednesday, adding the figure had been reduced from 8,000 layoffs after government intervention.
The newspaper, citing unidentified sources, said the airline will sacrifice Cathay Dragon but staff and resources of the two airlines would be merged. Cathay declined to comment.
The airline last month said it would not apply for further government employment subsidies for its main business units, allowing it to make job cuts at Cathay Pacific and Cathay Dragon, though not at budget carrier HK Express.
Cathay had refrained from major job cuts but Singapore Airlines Ltd <SIAL.SI> has announced plans to cut around 20% of positions, while Australia’s Qantas Airways Ltd <QAN.AX> has said it will cut nearly 30% of its pre-pandemic staff.
Cathay has sent around 40% of its passenger fleet to less humid locations outside Hong Kong for storage. On Monday, the airline said it expected to operate less than 50% of its pre-pandemic passenger flight capacity in 2021.
Passenger numbers in September fell 98.1% compared with a year earlier due to border closures, though cargo carriage was down by only 36.6%.
(Reporting by Jamie Freed; Editing by Christian Schmollinger)