Embattled Cathay Pacific Airways (0293) has yet to make material progress on staff arrangements after two rounds of meetings, while Goldman Sachs projects that the government-backed restructuring of the airline operator could see its workforce reduced by as much as 15 percent.
This would mean that up to 3,000 of the airline's 20,000 strong workforce in Hong are at risk of losing their jobs.
Hong Kong Dragon Airlines flight attendants met with Cathay's management yesterday, joining the Cathay Pacific Airways Flight Attendants Union, which earlier proposed launching a voluntary redundancy scheme to staff before the company turned to reducing employees.
Cathay will hold another meeting with staff representatives next week, local media reported.
The airline said it would forgo the government's second batch of wage subsidy, which was believed to be paving the way for staff cuts.
Goldman analysts compared the HK$39 billion capital restructuring of Cathay with those of Australian Qantas Airways and US airlines, and forecast that the restructuring would include adjustments in fleets, cost-saving measures and asset spinoffs.
The institution assumed that the scale of Cathay Pacific's layoffs would be similar to that of Singapore Airlines, which has suffered a similar shock amid the coronavirus pandemic and laid off around 4,300, or 20 percent, of its staff.
Meanwhile, the airline has also transferred part of its catering business from self-owned brand Deli-Delight to Asia Miles, which offers food delivery services for Tung Chung residents.
Goldman Sachs restated a "sell" recommendation on Cathay while raising the target price from HK$5 to HK$5.05. The broker will also act as an external financial advisor to the government in the restructuring.
Shares of the airline operator slightly gained 0.37 percent, closing at HK$5.43 yesterday.
Cathay's peers too are struggling amid global gloomy international air traffic prospects.
Philippine Airlines is cutting up to a third of its workforce, or around 2,700 jobs, as the aviation sector continues to suffer from pandemic-driven travel curbs, while US Southwest Airlines is asking unions to agree to pay cuts in order to prevent furloughs and layoffs through 2021 in the absence of more federal aid.
And German airline Lufthansa is burning cash at a rate of 500 million euros (HK$4.57 billion) per month and is far from breaking even, according to its chief executive Carsten Spohr.
Cathay will hold another meeting with staff representatives next week. SING TAO
