Cathay Pacific Airways Ltd said on Monday it was cutting 600 jobs, its biggest headcount reduction in almost two decades, as it seeks to return to profitability in an industry
battered by falling ticket prices.
In addition to cheaper tickets - the result of low fuel prices that led airlines to increase capacity - premium Asian carriers like Cathay and Singapore Airlines Ltd have had to contend with competition from mainland Chinese airlines that are expanding international routes aggressively.
The job cuts are the first step in a three-year reorganization plan announced this year by Hong Kong's flagship carrier. It posted an annual loss last year, its first since 2008, and is expected to be in the red again this year. Singapore Airlines, which made a loss in its latest quarter, has also
announced a strategic review.
"We have had to make tough but necessary decisions for the future of our business and our customers," new Cathay Pacific Chief Executive Rupert Hogg said in a statement.
The cuts represent 25 percent of management staff and 18 percent of non-managerial positions at its Hong Kong head office. The company had some 33,700 employees globally as of March.
Shares in Cathay rose 2 percent after the news and have climbed 13.3 percent for the year to date.