SYDNEY - Hong Kong's Cathay Pacific Airways Ltd said on Wednesday it would cut 5,900 jobs and end its regional Cathay Dragon brand as it grapples with a plunge in demand from the coronavirus pandemic.
The restructuring will cost HK$2.2 billion ($283.9 million) and the airline will also seek changes in conditions in its contracts with cabin crew and pilots, it told the stock exchange.
Overall, it will cut 8,500 positions, or 24 percent of its normal headcount, but that includes 2,600 roles currently unfilled due to cost reduction initiatives, Cathay said.
"The future remains highly uncertain and it is clear that recovery is slow," Cathay said in a statement, citing the International Air Transport Association's expectation it will take until 2024 for passenger traffic to recover to pre-COVID-levels.
The airline, which has stored around 40 percent of its fleet outside Hong Kong, said on Monday it planned to operate less than 50% of its pre-pandemic capacity in 2021.
After receiving a $5 billion rescue package led by the Hong Kong government in June, it had been conducting a strategic review that analysts expected would result in major job losses because it has been bleeding HK$1.5 billion to HK$2 billion of cash a month.
The restructuring will stem the cash burn by HK$500 million a month in 2021, the airline said.