HK Airlines lays off 700 more staff in battle to survive

Local | Michael Shum 24 Jun 2021

Michael Shum

Hong Kong Airlines laid off 700 employees yesterday to stay afloat, while its management will suffer a larger pay cut in the next six months.

This is the company's third redundancy exercise over the course of the pandemic, after it sacked 650 employees last February and December,and launched four rounds of no-pay leave since the outbreak began more than 16 months ago.

The airline confirmed last night that it had axed around 700 Hong Kong-based and overseas employees yesterday, totaling around a quarter of the company's 2,690 employees.

Affected employees will be compensated according to their conditions of service and in compliance with local labor laws, an airline spokesman said.

"Hong Kong Airlines is in critical survival mode. To secure our future, it is imperative for us to transform into a leaner and more efficient organization now to ensure that we can continue to operate sustainably in the challenging years ahead," he said.

"We also applied for various government subsidies, but they could only offer a small relief to our business."

Additionally, salaries for the company's senior management will be further reduced starting from this month until the end of the year, going from the current 15 percent cut to a cut as high as 36 percent, depending on job grade, according to the airline.

Deputy general managers and above will also continue taking no-pay leave, with a higher pay reduction from the current scheme.

"Hong Kong Airlines is still reeling from the cumulative impact of the social unrest and the ongoing pandemic. In the past two years, we have made valiant efforts to mitigate the impact from these crises," he added.

The company also said that the Voluntary Long Pay Leave Scheme for its employees received an overwhelming response, with around 600 applications approved for employees based in Hong Kong. The scheme was rolled out after the airline decided to ground its A320 fleet on June 9, which are capable of carrying 152 to 174 passengers per flight. According to the airline's website, the airline has 12 A320s among its 32-strong fleet. According to the scheme, pilots will be entitled to one month's salary for taking a six-month leave, and two month's salary for those who opt to go on a nine-month leave.

Last Tuesday, the airline also announced that its wholly-owned subsidiary, Hong Kong Aviation Ground Service, which provides ground services for the airline at the Hong Kong International Airport, will cease operations next month, rendering another 240 of its employees jobless.

The airline, which was having financial difficulties before the pandemic, has also applied for both tranches of the government's Employment Support Scheme between June and November last year.

It promised the government that it employs and will continue to employ 2,940 workers, and received a total of HK$154 million in wage subsidies.

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