Today, Hong Kong Airlines has announced it will be cutting its workforce by 10%, meaning that 400 employees will lose their jobs. The move comes amidst continued disruption caused by the Wuhan coronavirus outbreak.
The past year has been pretty dire for Hong Kong’s airlines. First, the Hong Kong protests caused massive disruption, forcing carriers to cancel thousands of flights. Now, the Wuhan coronavirus outbreak, which originated in China, has forced airlines to cancel thousands more flights as authorities try to stop the spread of the disease.
Today, Hong Kong’s second-largest airline, Hong Kong Airlines, announced it will be cutting 400 jobs in an attempt to mitigate mounting losses caused by the Wuhan coronavirus outbreak.
Travel bans in China and the surrounding region have severely affected Hong Kong Airlines’ capacity over the past few weeks, and it looks like the bans won’t be lifted for at least the next month.
A tough decision for the airline
Discussing the move with Reuters earlier today, a Hong Kong Airlines spokesperson said, “There has never been a more challenging time in Hong Kong Airlines’ history as of now. These decisions are difficult but had to be made to keep the airline alive.”
Hainan Airlines Holding Co., which partially owns Hong Kong Airlines, has witnessed a 14% drop in stock value since 22 January. This drop corresponds with the announcement of flight restrictions in and out of China at the end of January.
Responding to Simple Flying’s request for comment on the unfolding situation, Hong Kong Airlines revealed that there will be some additional restrictions placed on its employees over the coming months.
“Hong Kong-based ground staff are asked to take a minimum of two weeks No Pay Leave per month or work three days a week between 17 February and 30 June 2020,” an airline spokesperson said.
Trying times for Asian airlines
Unlike the Hong Kong protests, the Wuhan coronavirus outbreak hasn’t only affected airlines in Hong Kong.
Multiple countries in Asia have now imposed varying levels of travel restrictions in an attempt to curb the spread of Wuhan coronavirus. These travel restrictions have resulted in thousands of cancelled flights and big losses for airlines.
As reported by The Economist, Chinese stock markets suffered an 8% fall on 3 February as a result of the unfolding outbreak. Chinese airlines appear to have taken the hardest hit as a result of being in the epicenter of the outbreak. Shares in Air China, China Eastern Airlines and China Southern Airlines fell 20% following the announcement of the outbreak and the far-reaching travel bans on Chinese travelers.
Depending on how long the flight restrictions stay in place, we may well see redundancy announcements from a number of other Asian airlines. As they are already in a weak position due to the protests, Hong Kong-based airlines like Cathay Pacific are most susceptible to further losses as a result of the coronavirus outbreak.