Overseas Cathay Pacific Bases Are At Risk Of Closure

Hong Kong’s flag carrier Cathay Pacific is looking to shut numerous pilot bases as part of a review of its crew operations. Confirmed for the chop is the base in Canada, with those in Australia and New Zealand also under consideration. The move would see hundreds of jobs put at risk.

Cathay Pacific is closing its Canadian pilot base; others are at risk. Photo: Cathay Pacific

Cathay axes Canadian base

Cathay Pacific is reeling from a record loss of $2.8 billion in 2020, and is looking to save money where it can. As such, the airline is seeking to close a number of bases around the world.

The confirmed closure of its Canadian base has been announced today, according to a memo seen by the South China Morning Post (SCMP). The memo indicated that the airline is open to transferring pilots from the base to Hong Kong on a voluntary basis. However, a move like this could be met with resistance, given the large number of unemployed pilots already in Hong Kong following the closure of Cathay Dragon.

Its pilot bases in Australia and New Zealand have also been proposed for closure. At present, no decision has been reached on its operations in Europe and the United States. All pilots from passenger fleets have been stood down since May 2020, receiving varying levels of furlough support.

Australia and New Zealand are also at risk. Photo: Getty Images

SCMP states that its pilots in Australia have not been paid since April 1st, while European and US pilots have been receiving 50% of their salary. In Canada, pilots have been getting two-thirds of their usual salary, money that the airline can ill afford right now.

In a statement to SCMP, Deborah McConnochie, Cathay’s general manager for aircrew, said that,

“We have not made any decisions on bases other than Canada at this time nor any general decision on the future of bases – each base area will be considered on its own merits and any decision to close, maintain or restructure that base area will not have a bearing on any subsequent base reviews.”

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Still burning through cash

The airline’s record loss in 2020 has been further amplified by continuing cash burn into 2021. SCMP says the airline is still burning some HK$1.9 billion ($245 million) every month, and with little hope of international travel recovering soon, that looks set to be a trend that continues for most of the year.

McConnochie commented on the difficult financial situation, saying,

“Covid-19 continues to have a devastating impact on our industry and our airlines. Following the record loss for 2020, all of the company’s cash preservation measures continue unabated. It is clear that we must continue to review all areas of the business to ensure we emerge competitively from this unprecedented global crisis.”

Most of the airline’s A350s are flying, while the majority of its 777s remain grounded. Photo: Cathay Pacific

The airline has already reduced its workforce by some 29%, according to its annual report for 2020. Even so, it still has a huge surplus of pilots, and with very little of its passenger fleet in active use, the airline is faced with little choice but to seek additional contraction.

Planespotters.net indicates that the airline has only six of its 65-strong fleet of Boeing 777s in service. Just eight of its 39 A330s are flying. In contrast, most of its 747s and A350s are still flying, mainly picking up the slack in the cargo market at present.