Source: AP Photo/Ted S. Warren
By Seth Gellman
As the second wave of Coronavirus continues across the world, Cathay Pacific and Boeing have announced thousands of job cuts. Airlines have been furloughing employees throughout the pandemic, but they are now doing more rounds of cuts to cope with a loss in profits.
Boeing announced that they would be making more rounds of cuts on top of the 16,000 positions that were previously announced to be eliminated.
With a plunge in demand for air travel, Boeing faced a large drop in orders from Airlines. Without many flying, several airlines had to strike deals with governments or lay off workers.
In April, Boeing announced that it would cut 10%, or 160,000 of their workers in response to the pandemic.
Boeing also announced that it would be producing planes at a slower rate and halting construction of 747s after orders run out in 2022. Additionally, Boeing is considering whether to consolidate production of the 787 Dreamliner, from factories in both Washington and South Carolina, to just one facility.
Earlier in the year, 5,500 Boeing employees agreed to take buyout packages and leave voluntarily. Another 6,800 were laid off in May. There will be buyout packages offered to employees mostly in the commercial sector.
Boeing isn’t the only company in the airline industry cutting jobs, however. Cathay Pacific also announced that they were getting rid of about 8,500, or 24% of people from their company. 5,300 of these cuts will be in Hong Kong, where the airliner is headquartered.
Earlier in the summer, the Hong Kong government agreed to make a $5 billion dollar bailout of Cathay Pacific.
Cathay Pacific Group CEO Augustus Tang said that they were burning as much as 2 billion Hong Kong Dollars (258 million USD), which will now be reduced by around 500 million Hong Kong Dollars (50 million USD).
Cathay estimates that they will fly 10% of pre-pandemic flight capacity for the rest of 2020 and under 50% for 2021.
The future of travel is still very uncertain, with the International Air Transport Association estimating that revenue for airlines will be down about 50% this year. They also urged governments for safe Covid-19 testing and more financial support to prevent the collapse of the aviation industry. The coming months will be crucial for airlines, as the holidays are some of the most eventful times of the year. Whether they will be able to generate some of the revenue that offsets their costs will be something to watch.
