Hong Kong: Cathay Pacific Airways seeks new path with job cuts and revamp.
Changes at Asia’s biggest international airline "will start at the top" and the carrier will eliminate some positions as part of a review, with key changes taking effect by mid-year, Cathay said in a statement on January 18.
With premium travel declining and the diminishing role of Hong Kong as a transfer hub for Chinese outbound travelers, Cathay has been struggling to revive earnings. It also has a challenge at hand as Emirates and other Middle Eastern airlines expand more into Asia, luring passengers with frills. Cathay shares have slipped 33 percent since Ivan Chu took over as chief executive officer in March 2014 as the airline reported its smallest half-year profit in more than two years.
“The competition is here to stay and the uncertainty is the ‘new normal’ - we must simply respond,” Cathay said in the statement after a leadership conference in Hong Kong on January 18.
The airline is looking at ways to pare costs as mounting competition from Chinese and Middle Eastern carriers have eaten into Cathay’s premium long-haul customer base, causing passenger yields - a key measure of profitability - to drop to a seven-year low.
The carrier will hedge jet fuel for two years, instead of the current practice of four years, Chief Operating Officer Rupert Hogg told the South China Morning Post earlier in comments confirmed by Cathay.