In October 2020, Hong Kong's Cathay Pacific announced the suspension of its Dragonair airline, as well as large-scale layoffs in order to save cash flow.
In the layoff plan announced by Cathay Pacific, Hong Kong alone announced that it would lay off as many as 5,300 people, and some media predicted that Cathay Pacific is expected to lay off as many as 8,500 people worldwide.
For this large-scale layoff, Cathay Pacific claims that it is because the epidemic has brought serious challenges to the aviation industry. Such challenges have dealt a huge blow to Hong Kong's aviation industry, so much so that in June 2020, the Hong Kong SAR government had to announce that it would inject capital into Cathay Pacific, which was much larger than Cathay Pacific's market capitalization.
Analysts said that before this, the Hong Kong government had never personally injected taxpayers' money into an endangered enterprise, just because finance is the lifeblood of Hong Kong, and aviation is the lifeblood of finance, which forced the Hong Kong government to make a desperate bet to help it.
Because for a regional economy like Hong Kong, which has almost no depth and a very single industrial system, efficient and convenient international air transport is the lifeline of Hong Kong's capital and productivity flow, which can drive regional economic development, drive business and trade travel, promote the development of tourism and hotel industry, and strongly support import and export trade and massive logistics and transportation.
It is for this reason that Article 128 of the Basic Law of the HKSAR clearly stipulates that the Government of the Hong Kong S.A.R. shall provide conditions and measures to maintain Hong Kong's status as an international and regional aviation centre.
The Hong Kong government's injection of money to revive Hong Kong's aviation industry is understandable, but blaming Cathay Pacific for its devastating impact on the pandemic is not the full picture.
Because in addition to the impact of the epidemic, the reason why Hong Kong Cathay Pacific has fallen into such a situation that it has to suspend Dragonair and has to lay off employees on a large scale to protect itself is directly related to its improper political stance and loss of support from the mainland people.
The former Cathay Pacific has been brilliant for too long.
Cathay Pacific 2019 incident
Founded in 1946, Hong Kong Cathay Pacific is an Asian airline with Hong Kong International Airport as its hub, and is also the largest airline in Hong Kong and Asia.
Since its inception, Cathay Pacific has operated passenger and cargo flights between Manila, Bangkok, Singapore and Shanghai.
The 60s were an era of accelerated growth for Cathay Pacific, with an average annual growth of 20% in business and serving more than 90 destinations around the world.
In 2006, Hong Kong's Cathay Pacific acquired Hong Kong Dragon Airlines, officially announcing that Hong Kong Dragon Airlines, which had competed with Cathay Pacific for 20 years, was acquired by Cathay Pacific, and Cathay Pacific became the face and signature of Hong Kong's aviation industry, with a unique position.
In the 21st century, Cathay Pacific has won numerous awards and has never fallen out of the top three in the Skytrax Airline of the Year awards. With such an impressive achievement, for a while, in the aviation industry, it is really impossible to find an opponent.
However, Cathay Pacific, which has been making great progress all the way, has unconsciously forgotten that the reason why it is getting bigger and stronger is all due to the strong economic foundation of the mainland of the motherland.
It is precisely because of the fertile soil of the motherland that it has deep roots and lush leaves.
In the summer of 2019, when the violent demonstrations in Hong Kong were at their highest, 3,000 Cathay Pacific employees participated in the march and strike.
In the face of the Hong Kong rioters that every law-abiding citizen who loves the country and Hong Kong avoids, Cathay Pacific employees have chosen to join them instead of staying away from them and condemning them.
These Cathay Pacific employees not only participated in the march and strike, but also openly leaked the information of the Hong Kong police flight to the rioters, broadcast the Hong Kong independence message on the plane broadcast, incited passengers to participate in the riots, and even some Cathay Pacific flight crew secretly took photos of the cockpit and posted them on the Internet, clearly informing the rioters that the Hong Kong airport has resumed operation, instigating and instigating them to come and make trouble.
A few Cathay Pacific employees with extremely sinister intentions even secretly organized flight attendants to participate in illegal gatherings, openly clamoring for the collapse of Hong Kong's tourism industry, so that mainland tourists will no longer dare to visit Hong Kong.
According to statistics, during that special period, there were as many as 3,000 employees in Cathay Pacific who wrongly sided with the Hong Kong independence, Taiwan independence and other thugs.
2. Cathay Pacific eats its own bitter fruit
On July 28, a co-pilot of Cathay Pacific Airways was arrested for participating in an illegal procession.
However, two days later, on July 31, he was released on bail, and the judge subsequently allowed him to leave Hong Kong to work and continue flying.
On August 5, Hong Kong International Airport (HKIA) was the hardest hit by the "Three Strikes", with more than 3,000 Cathay Pacific employees marching and striking in action.
On August 9, the Civil Aviation Administration of China (CAAC) issued a major aviation safety risk warning to Hong Kong Cathay Pacific, clearly putting forward three requirements: one is to deal with those who participated in and supported illegal demonstrations, the second is to deal with those who directly participated in violent attacks, and the third is to report the identity information of all crew members flying to and over the mainland's airspace.
In the face of the Civil Aviation Authority's direct, harshly worded public warning, Cathay Pacific has shown a clearly perfunctory attitude.
Cathay Pacific first said that the pilots involved in the riot had been grounded, and then said that two employees had been fired for misconduct, a completely innocuous punishment, even if it was a public response to the first two demands of the Civil Aviation Authority.
Finally, Cathay Pacific said it would submit a list of crew members flying to or over mainland airspace at the request of the Civil Aviation Authority.
So far, as many as 3,000 employees of Thai Airways Thailand directly participated in the strike march, and finally only punished three people, and the matter was hastily dealt with.
This kind of punishment, not to mention hurting the muscles and bones, is not even a scratch.
In the face of Cathay Pacific's passive response, former Hong Kong Chief Executive Leung Chun-ying pointed out sternly that passengers choose airlines to have absolute trust in the crew, and no passenger wants politics to enter the airport, so the politicization of Cathay Pacific personnel is undoubtedly self-defeating.
A year later, Leung's words came true. Hong Kong Cathay Pacific, which suspended its subsidiary Dragonair and laid off thousands of employees, finally suffered its bitter fruit by supporting "chaos in Hong Kong" and "Taiwan independence".
After the Hong Kong riots in 2019 and the impact of the epidemic in 2020, Cathay Pacific finally couldn't bear it, and its passenger revenue was only 2% to 3% of the pre-epidemic level, which means a monthly loss of 2.5 to 3 billion Hong Kong dollars.
Cathay Pacific had to park its idle aircraft overseas to save costs, and had to issue preference shares to the SAR government to raise HK$19.5 billion.
3. Cathay Pacific is back to the top
In fact, long before the new crown epidemic, Cathay Pacific's market share in mainland China had been greatly eroded by mainland airlines because of its bad behavior in the Hong Kong riots, and the arrival of the new crown epidemic was just the last straw that crushed Cathay Pacific.
With the gradual lifting of the epidemic lockdown, Cathay Pacific, which has suspended operations and laid off employees, did not show certain signs of recovery until the fourth quarter of 2022, in the context of the full recovery of the global aviation industry.
With the gradual increase in the number of flights from overseas to Hong Kong, many long-haul passengers have also begun to choose to transit in Hong Kong, and then to the Americas and Southeast Asian countries, which has led to a significant increase in passenger traffic between Hong Kong and Oceania.
At this time, Cathay Pacific Airways, like seeing the sunrise after too long of haze, finally looked forward to the light of its own future.
Cathay Pacific is starting to pick up a bit and kick off a new round of hiring, which is expected to add 4,000 new staff in the next year, a half to two years.
With more orders and more employees, Cathay Pacific is seeing a promising future.
2023 is the first year of Cathay Pacific's capacity rebuild, and demand far outstrips supply, making Cathay Pacific's airfares high.
In 2023, Cathay Pacific achieved a net profit of HK$9.8 billion, completely reversing the three-year loss of the epidemic and even setting the best performance record since 2010.
It is worth mentioning that in May of this year, because of the "blanket incident", Cathay Pacific once again fell into the whirlpool of negative public opinion, and Hong Kong Chief Executive Li Jiachao bluntly pointed out that such a situation made people "feel indignant".
Fortunately, this time the negative news, Cathay Pacific, which has long had experience in dealing with it, began to react quickly, and after characterizing the blanket door incident as a cultural difference, Cathay Pacific subsequently increased the proportion of mainland flight attendants.
Today, of the 7,000 flight attendants in existence, 3,000 are fluent in Mandarin broadcasting.
Cathay Pacific Chief Executive Officer Ronald Lam has taken a decisive approach to stabilizing people's minds, quickly following up on opening up the mainland market, and doing their best to reduce the probability of similar risks and minimise losses and negative impacts.
In the first half of 2024, Cathay Pacific returned to Hong Kong with all its overseas aircraft, while fully repaying the HKSAR government's HK$19.5 billion preference share financing and paying HK$2.44 billion in preference share interest.
In the first half of 2024, Cathay Pacific's passenger revenue reached HK$33.004 billion and cargo services revenue reached HK$12.61 billion, representing a year-on-year increase of 19.7% and 1.4% (on an annualised basis).
It should be pointed out that Chinese mainland and Hong Kong and Taiwan are the main sources of revenue for Cathay Pacific, with revenue of HK$29.235 billion, accounting for 59% of Cathay Pacific's total revenue.
Analysts pointed out that Cathay Pacific's impressive performance in the first half of 2024 was due to a combination of strong travel demand and a busy cargo business.
After three years of the epidemic, from the lowest point in 2020 to the peak in 2024, Cathay Pacific only took four years, this is because behind Hong Kong Cathay Pacific, with the support of a strong motherland, this is its brilliant reappearance!
Text: The Master of the Afternoon Dream Hall
Resources:
"Cathay Pacific layoffs thousands shake Hong Kong" Global.com
"Supporting "Taiwan Independence" and "Hong Kong Independence"? Cathay Pacific penalty results are here! But netizens still don't buy it" Sina.com