TOKYO • Cathay Pacific Airways Ltd offered a voluntary early retirement package to employees in Japan as part of a three-year restructuring effort to revive earnings growth.
Cathay is undergoing a “comprehensive review” of regional organisation including North-East Asia, which consists of Japan, Taiwan and Korea, the airline’s Japan office said in emailed comments. Employees in Japan were briefed on the general outline of the new organisation at a July 23 meeting, where the voluntary early retirement programme was also announced, it said.
CEO Rupert Hogg is trying to turn around Cathay’s fortunes in the face of growing competition from budget carriers and Chinese rivals. Cathay — which cut 600 jobs in Hong Kong last year — would be looking at restructuring overseas operations after the efforts in its home city, chairman John Slosar said in August last year.
The restructuring process has yet to be finalised, Cathay Japan said in the statement. A spokeswoman at Cathay’s South Korean office said it’s undergoing structural changes in line with what has been done at the Hong Kong headquarters and declined to specify whether there would be job losses. Calls to Cathay’s Taipei office went unanswered.
The comments follow a South China Morning Post report that the airline plans to cut jobs at its overseas operations. The company has about 7,600 employees based in 100 locations outside Hong Kong, according to the report, which didn’t say how many would be affected.
Cathay is reorganising other teams to enable quicker and better informed decisions to be made, following the redesign of its head office structure, the carrier’s Hong Kong office said in an emailed response to questions.
An internal memo has been shared with employees on the restructuring, and this work will continue over the coming months, Cathay said. The aim is to establish a structure that “modernises our ways of working and thinking, makes us leaner and more agile”, the airline said, without referring to any job cuts.
The carrier will reduce costs by more than HK$4 billion (RM2 billion) over three years under its reform plan, with about HK$1 billion expected to come from scaling back pilots’ benefits and allowances, the newspaper said. Cathay has yet to reach any agreement with its pilots.
Increased earnings from associates including Air China Ltd, in which Cathay owns 18%, helped the Hong Kong carrier post a net income of HK$792 million in the second half of 2017. Still, competition from Chinese airlines and fuel-hedging losses resulted in a full-year net loss of HK$1.26 billion. That was its widest loss in five years, based on data compiled by Bloomberg. — Bloomberg