SYDNEY, March 16 (Reuters) - 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 seen by Reuters, a day after the airline
reported its first annual loss since 2008.
The memo, sent by chief executive Ivan Chu to staff on
Thursday, said the firm needed a "simplified, more agile and
smaller" head office structure, and that the "re-organisation
will inevitably result in some roles being made redundant."
Cathay Pacific reported its first full-year loss on
Wednesday since the 2008 global financial crisis, dragged down
by overcapacity, a strong Hong Kong dollar and mounting
competition from mainland Chinese carriers.
"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."
A Cathay spokeswoman confirmed the memo was accurate, but
said the company would not know the final number of role changes
or staff affected by the 30 percent cut in the cost of middle
and senior management roles until later in the process.
Cathay on Wednesday said it would grow its capacity by 4 to
5 percent this year despite the weak operating environment.
Chu on Thursday told staff there would be no "people cost
reductions" in customer facing roles including pilots, cabin
crew and customer service.
But he said a new head office management structure would be
announced in June for the company, which has 33,700 employees
globally. The company's website said more than 3,000 of its
staff are based in its head office.
The airline in January said it would cut jobs and consider
shifting some flights to its short-haul arm, Cathay Dragon,
after completing a strategic review. But it did not outline the
extent of the job cuts or other strategic initiatives, such as
increasing ancillary revenue at the time, to the disappointment
of analysts who had expected more detail.
(Reporting by Jamie Freed; Additional reporting by Brenda Goh
in SHANGHAI; Editing by Elaine Hardcastle)