Cathay Pacific Airways Ltd., Asia’s biggest international airline, plans to shorten its fuel-hedging program and revamp its workforce as part of a new business strategy to halt a slide in earnings. The shares jumped the most in nine months.
The carrier “won’t hedge as far forward as we have in the past” and will “rethink its workforce,” Chief Operating Officer Rupert Hogg told the South China Morning Post in comments confirmed by Cathay Pacific Monday. The Hong Kong-based airline plans to reassign employees from some outdated roles to new jobs that are better aligned with a “digital focus” while “never saying never” to redundancies, Hogg said.
Cathay Pacific is set to unveil a new strategy Wednesday following a “critical review” of its business as mounting competition from Chinese and Middle Eastern carriers caused the airline in October to scrap its second-half outlook. Chief Executive Officer Ivan Chu, who took the helm in March 2014, had said the carrier planned to continue with its fuel hedges.
Cathay Pacific lost HK$8.4 billion (USD 1.1 billion) in the three years to December 2015 on account of fuel hedging. In the first half of last year, the loss was HK$4.49 billion.
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