Battered by Wuhan virus outbreak, Cathay asks staff to take three weeks’ unpaid leave

A Cathay Pacific flight takes off for Hong Kong from LAX in 2013. Photo via Flickr/InSapphoWeTrust.
A Cathay Pacific flight takes off for Hong Kong from LAX in 2013. Photo via Flickr/InSapphoWeTrust.

The CEO Cathay Pacific has asked all of the airline’s 27,000 employees to take three weeks of unpaid leave in the coming months, as Hong Kong’s flag carrier reels from the catastrophic effect of the Wuhan coronavirus outbreak on air travel in and out of Hong Kong.

In a statement to Coconuts HK on Wednesday, the local flag carrier said it was giving its employees the option under a “special leave scheme” to voluntarily take leave at some point between March 1 and June 30, with CEO Augustus Tang Kin-wing disclosing in a pre-taped message that the current situation is as dire as the global financial crisis of 2009.

“And we don’t know how long this will last… With such an uncertain outlook, preserving our cash is now the key to protecting our business,” Tang said.

“We are asking suppliers for price reductions, implementing hiring freezes, postponing major projects, and stopping all non-critical spend.”

Airlines have been hit hard by the recent outbreak, which has disrupted flight schedules and prompted many travelers to cancel trips to destinations where the virus is present. Cathay in particular had already been battered by months of protests in Hong Kong, which also put a damper on travel to the city.

So far, more than 24,500 people have contracted the virus in Mainland China, where it has killed almost 500. There have been two deaths outside of China as well, including one in Hong Kong on Tuesday.

One Cathay Pacific flight attendant, who asked to be identified only as Ah-Ho, told Coconuts HK on Wednesday that news of the special leave scheme came as a shock.

“I have heard from some experienced seniors that the current arrangement of the company is even worse than [during] the 2003 SARS [outbreak],” he said. “The business of Cathay still hasn’t recovered from the anti-extradition bill protests.”

However, he said the situation may be a blessing in disguise, as working on a flight increased the risk of coming into contact with infected passengers.

Taking three weeks of unpaid leave, he added, would not pose a major financial burden to him.

Another flight attendant for Cathay Dragon, Cathay Pacific’s sister airline, said the special leave scheme was an a slap in the face after flight crews were allegedly not provided with sufficient face masks to protect crews in-flight.

In Wednesday’s video, CEO Tang said the recent Lunar New Year holiday, normally one of the most profitable times of the year for the airline, was “one of the most difficult we have ever had.” The airline has also announced it will be slashing the number of flights it offer by as much as half in the coming months.

Bocom International airline analyst Luya You told Coconuts HK on Wednesday that Cathay’s current cost-cutting strategies were fairly prudent.

“Their financial needs are clear — costs desperately need to lower — but I believe their present strategy is to avoid long-term impact cuts as much as possible,” You said.

“This means they are likely shelving more permanent measures, such as staff cuts, aircraft parking, axes routes, etc. as possible last resorts.”

Amber Suen, vice chairwoman of the Cathay Pacific Airways Flight Attendants Union, told local broadcaster RTHK later on Wednesday that management should not start sacking people due to its reduced cash flow, and added that it’s too early to say whether how many members will heed management’s call to take leave.

“We do hope the company [will] properly address our previous concerns and previous requests, like providing sufficient protective equipment for our members, and also to 100 percent close or suspend all mainland China flights. That is our main concern,” she said.

 

Reporting by Erin Chan.

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