(6 days ago)
Cathay Pacific Airways Ltd plans to cut the cost of middle and senior management roles at its Hong Kong head office by 30 percent, according to an internal memo a day after the airline reported its first annual loss since 2008.
The memo, sent by chief executive Ivan Chu to staff on Thursday and seen by Reuters, said the firm needed a "simplified, more agile and smaller" head office structure, and that the "re-organization will inevitably result in some roles being made redundant".
Shares in Cathay Pacific jumped by as much as 2.5 percent on Friday following the Reuters report, with analysts saying the move would help support Cathay's bottomline in the short term. Its shares have fallen about 18 percent over the past year.
The Hong Kong flag carrier earlier this week reported its first full-year loss since the 2008 global financial crisis, dragged down by overcapacity, a strong Hong Kong dollar and mounting competition from mainland Chinese rivals.
"The outlook remains challenging and we do not expect to see any fundamental shift due to the structural issues we are faced with," the memo said. "Our airlines have not seen a review of the business or restructured our teams for over 20 years. We cannot afford to stand still."