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Cathay Pacific wrestles with uncertainty as it prepares to fly again

08/20/2020| 10:27:36 PM|

It will be painful, not least for its 33,000 staff worldwide, including 4,100 pilots and more than 12,500 flight attendants.

It was the early 1990s and Augustus Tang Kin-wing was among the key executives involved in a massive shake-up of Cathay Pacific Airways called “Operation Better Shape”.

The airline’s bloated staff structure needed fixing from top to bottom, with concerns growing over staff costs, particularly pilots’ pay.

The result included slashing layers of duplication and expensive managers, introducing less lucrative pay packages for Hong Kong-based pilots, a hiring blitz for less costly foreign cockpit crew outside the city, and moving business units to locations with lower labour and office costs.

Tang, now 61 and chief executive officer, is likely to draw on that experience as the Cathay group embarks on what may well be the biggest overhaul in its 73-year history as it prepares for a post-pandemic world.

Tang must face his board by the last quarter of this year with a plan to transform the airline into an “optimum size and shape”.

It will be painful, not least for its 33,000 staff worldwide, including 4,100 pilots and more than 12,500 flight attendants. The group employs 27,600 people in Hong Kong.

Brendan Sobie, of consultancy Sobie Aviation, does not expect Cathay’s overhaul to be a “one time, fix all” plan.

“Cathay needs to restructure now and right-size for the next three to five years, while putting in place the building blocks to eventually resume growth and improve its long-term position,” he said.

“However, the new business plan will need to be flexible enough to adjust as a clearer picture develops for what the overall industry will look like, and what Hong Kong will look like, after the pandemic ends.

“There are so many unknown variables now that will still be unknown when the current review is completed.”

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TAGS: Cathay Pacific | Sobie Aviation
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