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Cathay Pacific announced today that it will lay off 8,500 employees. Dragonair, its subsidiary, has even gone down in history. Compared to the tragic situation at Cathay Pacific, China Airlines announced that it will increase flights to Hong Kong starting in November, with 12 round trips between the north, center and south each week. In this regard, the aviation industry told academics that in addition to Cathay Pacific’s too large scale to support human loss, “cargo volume” is also key.
The aviation industry said the biggest problem with the Cathay Pacific layoffs and the Dragonair closure is that the scale is too large and the load cannot support the entire company. Besides China Airlines, the two main airlines in Asia for cargo traffic are Korean Air and Asiana Airlines.
The person said that in August this year, the US routes of China Airlines and Evergreen had a passenger load rate of less than 20%. Cathay Pacific should have been in a similar situation. Money is so much. There is no flight path, but the plane is still parked there. The rental company cannot agree to withdraw the lease. Just like the house is signed, it will not be easily returned. “You have to stop the bleeding and drain the blood.” It becomes the last resort to maintain cash flow.
As for why China Airlines may also increase flights to Hong Kong, another industry person said: “Maybe I hope the plane can move.” Hong Kong is relatively close to other destinations and the cost is relatively low. Keeping the aircraft running also helps pilots maintain their licenses. After all, it is a cost to retake the test.
“The disaster in the aviation industry is about to begin,” said Huang Tailin, a professor in the Department of Aviation Management at Evergreen University. According to the International Air Transport Association, it is possible to return to the level of the aviation industry in 2019 in 2024. The degree and speed of recovery are even unknown. The industry cannot last that long and will naturally be closed.
Huang Tailin said airlines must save costs and expand freight revenue to survive the epidemic. For China Airlines, it has the world’s largest fleet of Boeing 747 freighters and Evergreen’s cargo volume is also very high, but Cathay Pacific does not focus on freight. It is mainly used to transport business passengers and the key operational projects are different, leading to layoffs today.
Dai Zuomin, a professor at Chenggong University’s Department of Traffic Management, also said that Taiwan’s aviation industry has responded well, because China Airlines has a cargo fleet and Evergreen uses cabin cargo. I believe that when the vaccine is released, the misery of the aviation industry will gradually ease.
Dai Zuomin said that the Cathay Pacific situation today is normal. The transport volume is already very small. If there is no income, there will be cash flow problems. It is necessary to reduce expenses, cut shifts and cut people, and renegotiate working conditions. Among them, pilots and flight attendants are directly related to the volume of traffic and can be expected to be the biggest victims of this wave of layoffs.
