Hong Kong Airlines has started to let workers go after a brutal few months of poor performance. Thanks to prolonged unrest in Hong Kong followed by the restriction of flights due to the coronavirus, the startup airline has been unable to recover from its financial peril.
What are the details?
Hong Kong Airlines has had a hard run.
Originally, the airline was facing troubling financial conditions thanks to an awkward financial situation for its owner, HNA group. A consequence of this was the deferral of Airbus A350 deliveries, at a time that the airline was rapidly expanding. Then, at one point, the airline claimed to have two CEOs as two rivals duked it out in the boardroom.
The government of Hong Kong ended up issuing the airline with a notice, claiming if it didn’t take steps to improve its financial standing then they may (and a heavy emphasis on the may) revoke its operating license. The airline took steps to curb outgoings, including removing inflight meals, entertainment, blankets, and pillows onboard its aircraft.
But the situation looked grim when Hong Kong was rocked by civil unrest, a situation which was rapidly followed by the outbreak of coronavirus in China. This caused many routes to be terminated or suspended (including those to Hong Kong).
What’s the latest on this airline?
It seems that the steps that the airline has taken to shore up its figures have not worked out well. The airline has made moved to eliminate a significant number of staff members.
At the beginning of February, the airline made plans to reduce its workforce by around 400, considering job cuts in all categories from admin to flight attendants. However, on the 20th of February, the airline accelerated its plans to reduce its wage bill by eliminating 80 jobs. Those 80 staff members were invited to a closed-door meeting in which their redundancy was laid out.
And it is not a great deal. According to CH-Aviation, the typical Hong Kong flight attendant earns around $20,000 HKD ($2,568 USD) and that’s after overtime. Typically, flight attendants earn a base salary of around half of that amount, and might only get a month’s severance at the point of redundancy.
With the news that the coronavirus restrictions won’t be lifted for a few more weeks and no influx of cash on the horizon, Hong Kong Airline’s recovery looks far far away.
Discussing the job losses with Reuters earlier this month, 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.”
What do you think of this news? Will this job elimination help Hong Kong Airlines? Let us know in the comments.