Cathay Pacific has announced it will ground two-fifths of its passenger fleet for the “foreseeable future”, in a move it deems necessary in order “to survive and thrive” into the future.
The Hong Kong flag carrier has announced that it will park 72 of its aircraft, making up 40 per cent of its fleet, outside of Hong Kong as it waits for demand conditions to improve.
The airline is currently operating at just 8 per cent of its pre-COVID flight capacity, while its planes are operating at just under 20 per cent of their usual load factors, a new record low for the airline.
Further, Cathay has also warned that it may not survive the COVID-19 pandemic unless it introduces a dramatic restructure, again hinting at impending job losses in the near future.
Cathay executive director Ronald Lam Siu-por noted that the carrier was “facing a long and uncertain road to recovery”, and said that its sweeping restructure plans are likely to be revealed by next month.
“We are weathering the storm for now, but the fact remains we simply will not survive unless we adapt our airlines for the new travel market,” Lam warned.
“A restructuring will therefore be inevitable to protect the company, the Hong Kong aviation hub, and the livelihoods of as many people as possible.”
This outcome was previously foreshadowed when the airline said it would not be accepting any further government wage subsidies for Cathay Pacific and Cathay Dragon, as doing so would require the company to protect jobs until November.
However, a number of the airline’s subsidiaries will make use of further wage support.
Cathay Pacific is currently burning between HK$1.5 billion (US$193 million) and HK$2 billion (US$258 million) per month as it continues to battle through the COVID-19 aviation crisis.
Analysts have previously warned that airlines like Cathay Pacific and Singapore Airlines will take far longer to recover from the crisis than most, as they have no domestic network to rely upon until international conditions improve.