Lose 2 billion cash a month, Asias largest airline company announced 6000 job cuts

category:Finance
 Lose 2 billion cash a month, Asias largest airline company announced 6000 job cuts


Photo source: visual China

According to the CEO of Cathay Pacific, most of them are affected by the CEO of Cathay Pacific. He described the layoff as a painful but necessary decision and was deeply sorry for it.

The financial secretary of Hong Kong, Mr. Chen maobo, said that the restructuring of Cathay Pacifics business was a business decision of the group. Two observers appointed by the government to the groups board of directors have provided the company with reference on the arrangement. He reminded the management of the need to minimize the impact on employees and society in the course of business adjustment.

Image source: wind

Announcement of corporate restructuring

On October 21, Cathay Pacific announced that it would cut 8500 jobs, accounting for 24% of the groups 35000 jobs. At the same time, Cathay Pacific Dragonair ceased operation from the 21st.

Photo source: Cathay Pacific Bulletin

Of the 8500 jobs, about 5300 Hong Kong based staff will be cut in the next few weeks, and about 600 non resident staff may be affected. In addition, the remaining 2600 jobs are now vacant due to the implementation of measures such as freezing recruitment and closing some overseas bases in recent months.

Cathay Pacific intends to seek regulatory approval to operate most of Cathay Pacific Dragonair routes by Cathay Pacific and its wholly-owned subsidiary, Hong Kong Express.

Cash loss of HK $2 billion per month

On October 19, Cathay Pacific announced its passenger and cargo traffic data for September. The data showed that Cathay Pacific and Dragonair carried 7061 passengers / time in September, down 98.1% compared with the same period last year, and the number of passenger kilometers in revenue decreased by 97% year on year. Freight performance was slightly better, with 9453 metric tons of cargo carried in September, down 36.6% year-on-year.

Cathay Pacifics customer and business president, Lin Shaobo, said in the announcement that summer should be the peak season for passengers to travel, but the groups passenger transport data so far show that this summers operation is very difficult. We resumed flights to Cebu and Perth within the month, but the capacity in September was only 9% of the normal level, slightly higher than the 8% in August. During the month, there were only 1568 passengers per day on average, and the carrying rate was about 25%

According to the securities times, Cathay Pacific has taken self-help measures in the past few months, such as suspending unnecessary expenses, delaying aircraft delivery, launching special leave plans and salary cuts for senior management.

In the next business arrangement, Cathay Pacific plans to reduce its passenger capacity in 2021 to well below 50% in 2019. Assuming that the vaccine currently developed is proven effective and can be successfully launched globally in the summer of 2021, the company expects passenger transport capacity in the first half of 2021 to be far less than 25%, but it is expected that passenger transport capacity will gradually recover in the second half of 2021, the company said.

Photo source: photo web

At least 20 airlines in the world announced bankruptcy and reorganization

According to CCTV, at present, most of the major airlines in the world have already sent signals that the jobs of up to 400000 employees may be affected, some of which are direct layoffs and some are forced to take leave from January next year.

In this context, the performance of a number of airlines is also difficult to be optimistic. According to the China Fund report, Qantas lost a $1.964 billion in fiscal year 2019 / 20. JAL reported a net loss of 93.7 billion yen in the first quarter. Singapore Airlines lost S $1.037 billion in the first quarter. Lufthansa had a net loss of 1.5 billion euro in the second quarter. Air France KLM had a net loss of 2.612 billion euro in the second quarter. IAG group, the parent company of British Airways, lost 2.177 billion euros in the second quarter. American Airlines lost $2.486 billion in the second quarter.

According to a previous statement by the International Air Transport Association (IATA), airlines around the world have cut spending by more than 50% in the second quarter of this year, but the revenue of airlines in the same period is still 80% lower than that of last year. IATA expects global airlines to spend $77 billion in cash in the second half of this year, equivalent to $300000 per minute. Under the influence of the epidemic, IATA estimates that the economic losses of global airlines will reach 84 billion US dollars this year, and the revenue of this year is expected to be 419 billion US dollars, only half of that of last year. The global air passenger traffic volume will not return to the level before the epidemic until at least 2024. (this article is for reference only and does not constitute an investment proposal. Therefore, the operational risk shall be borne by yourself) source: Daily Economic News Editor: Wang Xiaowu_ NF

According to a previous statement by the International Air Transport Association (IATA), airlines around the world have cut spending by more than 50% in the second quarter of this year, but the revenue of airlines in the same period is still 80% lower than that of last year. IATA expects global airlines to spend $77 billion in cash in the second half of this year, equivalent to $300000 per minute.

Under the influence of the epidemic, IATA estimates that the economic losses of global airlines will reach 84 billion US dollars this year, and the revenue of this year is expected to be 419 billion US dollars, only half of that of last year. The global air passenger traffic volume will not return to the level before the epidemic until at least 2024.

(this article is for reference only and does not constitute an investment proposal. Therefore, the operation risk shall be borne by yourself.)