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Coronavirus

Cathay Pacific asks all employees to take three weeks' unpaid leave

Airline also cuts mainland China flights by 90% amid coronavirus outbreak

Cathay Pacific has slashed mainland flights amid the coronavirus outbreak.   © AP

HONG KONG -- Cathay Pacific Airways is asking all of its 27,000 employees to take three weeks of unpaid leave in the coming months, CEO Augustus Tang told staff on Wednesday. The request comes one day after the Hong Kong flag carrier announced a 90% cut in mainland China flights due to the coronavirus outbreak.

"This has been one of the most difficult Chinese New Year holidays we have ever had," Tang told Cathay employees in an internal video announcement seen by the Nikkei Asian Review, as he introduced the "special leave scheme" under which all employees will have the option of taking three weeks of unpaid leave from March 1 to June 30.

"I am appealing to each and every one of you to help," Tang said. While he did not say the scheme is mandatory, he said he hoped staffers will "all choose to participate, from our front-line employees to our senior leaders, and to share in our current challenges."

In response to Nikkei's inquiry, a Cathay spokesperson confirmed that the company is "appealing to all employees to participate in the special leave scheme" in view of the novel coronavirus outbreak and a significant drop in market demand.

On Tuesday, the Hong Kong-based airline unveiled a 90% cut in flights to and from mainland China and a consolidation of flight schedules on other routes, bringing the total capacity reduction to 30% worldwide. About one-fifth of all Cathay flights serve mainland China.

Cathay last introduced an unpaid leave scheme in 2009 during the global financial crisis. During that time the airline "had the overwhelming support from employees," Tang said in the video. "The situation now is just as grave."

He added the preserving cash is now the key to protecting Cathay's business at such an uncertain time. The airline is also asking suppliers for price reductions, implementing hiring freezes, postponing major projects and stopping all noncritical spending. "We don't know how long this will last," he said.

In late January, Cathay Pacific suspended a lucrative extra pay scheme for cabin crew, while Cathay Dragon, its subsidiary, offered flight attendants up to 11 months of voluntary unpaid leave as the airlines plan to cut costs in the year ahead.

"My colleagues and I all understand the situation, but we are also extremely worried about our own financial situation," said a Cathay flight attendant who gave her surname as Cheung. "In this critical time, it is hard to look for another job. It's already nice that we don't get dismissed."

Cathay Pacific's flight attendants' union said later on Wednesday that it will discuss the company's request internally.

"We urge the management not to start sacking people due to its reduced cash flow," Amber Suen, vice chairwoman of the Cathay Pacific Airways Flight Attendants Union told public broadcaster RTHK.

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