Job cuts expected as Cathay Pacific targets 30% savings in management costs

Cathay Pacific Airways is targeting a 30% cut in head office management costs, the airline revealed, two days after posting half a billion dollars in losses. Layers of bureaucracy will be stripped away, taking effect from the summer, as the premium airline commences a three-year transformation plan to revive the business. The axe will fall on middle and senior management in Hong Kong and the head office, though the final number of jobs to go has yet to be finalised, a source familiar with the matter said. Cathay Pacific reports first loss since 2008 as rivals’ cheaper fares erode margins. At present, 19,000 people work within the Cathay Pacific group’s airline businesses based in Hong Kong. Excluding pilots and cabin crew, that leaves 5,300 employees in a variety of head office functions. On Wednesday, Cathay Pacific revealed that a HK$6b profit in 2015 turned into a HK$575m loss in the last financial year. Out of HK$93.2b in costs, staff costs amounted to HK$19.9b. The financial results, the airline said, reflected a number of challenges from intense competition in the form of more direct flights in mainland China, rival carriers increasing the number of seats on competing routes with Cathay, more passengers paying lower fares, and ongoing losses on fuel hedging.<br/>