Cathay Pacific Airways, Hong Kong's flahship carrier, after posting its first annual loss in nine years, has decided to lay off 600 employees, said to the biggest in 20 years, even as Singapore Airlines reported weak results for the financial year ended March 2017.
"We have had to make tough but necessary decisions for the future of our business and our customers," Rupert Hogg, the new chief executive of Cathay Pacific, said in a statement.
The carrier had around 33,700 employees at the end of March this year and reported $76 million loss for 2016.
The job cuts are the biggest since the 1998 global financial crisis and could potentially result in savings of about $64 million annually, Reuters quoted Singapore-based UOB Kay Hian analyst K. Ajith as saying.
"It's not just Cathay that has to do it but other carriers as well. We have to see global capacity additions come down and airlines would have to mothball aircraft, instead of trying to still utilize and cover some of the costs associated with that," he told the news agency.
In a related development, Singapore Airlines reported fall in group revenues, operating profit and net profit for the financial year 2016-17, despite growth in passenger traffic.
"Group revenue fell S$370 million year-on-year to S$14,869 million (-2.4%). Passenger flown revenue declined S$382 million (-3.2%) despite traffic growth (+2.6%) as yields continued to come under intense pressure," Singapore Airlines said in a statement.
Net profit for 2016-17 dropped 55.2 percent to S$360 million from S$444 million, "attributable in part to the net loss recorded in the fourth quarter," according to the company. Passenger load factor dropped to 79 percent.
Its low-cost carrier SilkAir posted all-round improvement. "SilkAir's operating performance improved $10 million (+11.0%) compared with the last financial year. Total revenue grew $25 million, backed by a 9.5% increase in passenger carriage against a 10.6% capacity injection, partially diluted by a 7.4% decline in yield."
The emergence of other aviation hubs in Asia to connect with the rest of the world has sharply affected carriers in Singapore and Hong Kong, according to the Financial Times.
On Monday, Singapore Airlines shares were trading 1.90 percent down at S$9.79 apiece on Singapore Stock Exchange, at around 12.19 pm IST.
