Troubled carrier Hong Kong Airlines said Thursday (10 June) that it “is now in a critical survival mode” due to the COVID-19 pandemic and it will be grounding planes, focussing on cargo flights and may cut jobs to survive. The airline has also suffered from the political unrest affecting the whole of Hong Kong.
The airline said in a statement that it would “downsize” the entire organisation by merging departments and consolidating job responsibilities. It said “surplus” employees would be dealt with by “various actions” including a “Voluntary Long Pay Leave Scheme” and possible firings. The airline will also introduce a new pilot remuneration package and a “No Pay Leave scheme” will continue until further notice. To further save costs, all employees at the airline’s Citygate offices in Hong Kong will be relocated to HKA Training Academy Tower at Hong Kong International Airport by August 2021.
Hong Kong Airlines said its active fleet will be made up of around eight Airbus A330 aircraft to support belly cargo operations with limited passenger services. The airline’s entire Airbus A320 fleet of 12 aircraft will be grounded for one year starting in July. All A320 pilots will be offered Long Pay Leave, receiving one month of fixed salary for six-month LPL and two months of fixed salary for nine-month LPL respectively.
“In the past two years, our business has been severely affected by the social unrest followed by the prolonged pandemic,” Hong Kong Airlines said in its statement. “During this challenging period, valiant efforts have been made to mitigate the impact from these crises. To keep the company alive and save as many jobs as we possibly could, cost-savings measures and no pay leave schemes were implemented. At the same time, we expedited our consolidation and adjusted our business strategy from time to time to respond to changing market conditions. We also applied for various government subsidies, but they could only offer a small relief to our business.
“With the collapse of air travel and no recovery in sight, an organisational restructure deemed to be executed together with our ongoing consolidation drive can no longer be delayed,” the airline added. “It is imperative to transform Hong Kong Airlines into a leaner and more efficient organisation now to ensure that we can continue to operate sustainably in the challenging years ahead.”