Cathay pledges to slash staff costs after loss
Hong Kong's troubled flagship airline Cathay Pacific said Friday it would slash staff costs by 30 percent as part of a major overhaul in the wake of losses.
The announcement came after the firm posted its first net loss in eight years on Wednesday, saying it had been hit by intense competition and a drop in demand from business travellers.
Cathay had already revealed its biggest shake-up in 20 years in January, saying some jobs would go but providing little detail.
In a statement Friday, it said middle and senior management at its Hong Kong head office would be targeted as it sought to cut employee costs by almost a third, although it gave no further indication of how many jobs could be axed.
"It is clear that there is a need for an organisational structure that will allow the Cathay Pacific Group to succeed," the statement said.
It added that the firm was seeking to create a "leaner, simpler structure" and that management changes would be announced in June.
The move is part of a three-year "transformation programme" designed to breathe new life into the airline.
Cathay has been struggling despite an expansion of international air travel in the region as lower cost carriers, particularly from mainland China, eat into its market share.
The airline is also losing premium travellers as it comes under pressure from Middle East rivals which are expanding into Asia and offering more luxury touches.
That has led to promotional prices for Cathay's top tickets as they are sold to leisure travellers.
Its $74 million net loss in 2016 reversed a $773 million profit in the previous year, with chairman John Slosar warning 2017 would be similarly "challenging".
It was the firm's first annual loss since the height of the financial crisis in 2008.
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