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AFP
Hong Kong
Hong Kong's flagship airline Cathay Pacific said Monday it would cut 600 staff including a quarter of its management, as part of its biggest shakeup in two decades to repair its bottom line.
In March the company posted its first annual net loss in eight years, citing intense competition as lower cost airlines, particularly from mainland China, eat into its market share.
It pledged at the time to slash costs by 30 percent after its $74 million net loss in 2016 reversed a $773 million profit in the previous year.
In a company statement Monday, the airline said it would shed 190 management roles as well as 400 non-managerial positions at its Hong Kong head office."We have had to make tough but necessary decisions for the future of our business and our customers,"said CEO Rupert Hogg.
"Changes in people's travel habits and what they expect from us, evolving competition and a challenging business outlook have created the need for significant change."
No pilots, cabin crew or frontline employees would be affected but they would be asked"to deliver greater efficiencies and productivity improvements", the statement said. Aviation analyst Corrine Png told AFP the company was moving"in the right direction"as it looked to transform the business and improve cost competitiveness.
"The challenge is when you start to cut staff head count... you really have to keep the staff morale high,"she said.
"They haven't really touched the frontline -- pilots, cabin crew, customer service -- so at least this part hopefully will reduce the possibility of compromising the product."
Singapore Airlines (SIA) also reported a net loss of Sg$138.3 million ($99.4 million) in the fourth quarter last Thursday, causing full-year net profit to drop by more than half from the previous year.
It said in a statement that a"wide-ranging review"of the company's network, fleet, services and organisational structure was underway.
Intense competition has continued to hit premium carriers despite an expansion of international air travel in the region, as mainland Chinese airlines aggressively scale up long-haul routes.
News of Cathay's layoff came as China's Hainan Airlines announced plans Monday to buy 19 Boeing aircraft for $4.2 billion to help meet rocketing demand.
