HONG
KONG's Cathay Pacific Airways chairman Patrick Healy has warned that "tough decisions will need to
be made" by the fourth
quarter of the year as part of "right-sizing"
efforts.
He adds that "nothing is off
the table" in the upcoming review of the Cathay Pacific group's business
model, but stopped short of saying whether any staff might be laid off as a
result.
Mr
Healy was speaking at the Cathay's unveiling of a HK$39 billion (US$5 billion)
recapitalisation plan, reports London's FlightGlobal. The Hong Kong Government has stepped in with a
significant capital injection for the beleaguered carrier, which has been hard
hit by collapsed travel demand following the coronavirus outbreak.
Cathay is undertaking a review of
its business model. By the fourth quarter of the year, the carrier's senior
management team will make recommendations to its board on the "optimum
size and shape" of the group.
Mr Healy said the management team
will be spending the next few months evaluating the situation and make an
assessment of the medium- and long-term prospects.
"On the future of sister
company Cathay Dragon - which recent media reports have suggested might be
absorbed into Cathay or low-cost arm HK Express, Mr Healy said: "We cannot
take anything off the table. We do not have any plans around restructuring
other than the recapitalisation plan announced."
"Cathay also announced a
fresh round of pay cuts for management team, as well as a second round of
voluntary special leave scheme for its employees.
"The reality is that, given
the extent of the global pandemic and its impact on the aviation industry
worldwide, commercial debt markets are effectively closed to airlines who do
not have extensive government and shareholder support," he said.
Cathay earlier disclosed that it
had been burning cash at a rate of around HK$2.5 billion to HK$3 billion a
month since February. It began the year with around HK$20 billion in liquidity.
Source : HKSG.
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