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Cathay Pacific to axe 6,000 employees, gets rid of Cathay Dragon brand

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The original plan was to make 8,000 roles redundant.

Multiple news outlets today reported that Cathay Pacific will be retrenching 6,000 employees worldwide, with close to 5,000 of these roles lost in Hong Kong itself.

The international airline was originally planning to axe up to 8,000 staff, but reduced it to 6,000 after government intervention.

The airline will also remove another close to 2,600 unfilled positions, bringing the total tally of positions lost to 8,500.

With a total workforce of 33,000 staff, the 6,000 employees axed come to under 20% of its staff strength, signifying a smaller cut that what some other airlines have undertaken.

The cuts came after Cathay Pacific Group took up a government aid worth HK$27.3 billion (S$4.8 billion) in June, which came with the condition that the airline must appoint two government selected observers to the board to oversee the investment and protect taxpayers’ money.

According to the airline, affected staff will be offered “severance packages that go well beyond statutory requirements”, and extending medical benefits and staff travel entitlements, as well as providing counselling and job transition support services.

Cathay Dragon brand to cease

As part of the cost reduction programme, Cathay Pacific Group will also sunset its Cathay Dragon brand immediately.

Cathay Dragon

According to SCMP, Cathay Dragon has 48 aircraft primarily flying to mainland China and other regional destinations, including Kuala Lumpur, Okinawa and Dhaka.

While the regional airline will cease to exist, most of the airline assets and staff will be merged into the Cathay Pacific group to be redeployed.

The airline is also seeking regulatory approval for the majority of the regional carrier’s routes to be absorbed and operated by Cathay Pacific and budget carrier HK Express within the group.

It’s likely that HK Express may take over most of the the mainland China routes, particularly those served by the smaller A320 and A321s. Cathay Pacific will most likely take over destinations served by the A330s, although we may expect some of these destinations to close altogether given the slow recovery rate over the next couple of years.

Other cost measures

Cathay Pacific will also be implementing some other cost measures to bring down its cash-burn rate, including salary freezes and new union contracts for its cabin crew and pilots.

Cabin crew and pilots will be asked to change their collective agreement terms, most likely will result in lower wages, so that “their conditions of service which are designed to match remuneration more closely to productivity and to enhance market competitiveness”, according to Cathay Pacific.

Separately, Cathay Pacific will continue to cut their executives’ pay through 2021. For all staff, there will also be no salary increases across 2021.

The airline will continue to initiate another voluntary Special Leave Scheme for non-flying employees for the first half of next year.

CEO commentary

Cathay Pacific Chief Executive Officer Augustus Tang said: “The global pandemic continues to have a devastating impact on aviation and the hard truth is we must fundamentally restructure the Group to survive. We have to do this to protect as many jobs as possible, and meet our responsibilities to the Hong Kong aviation hub and our customers.

“Our immediate priority is to support those affected by today’s announcement. We are deeply saddened to part ways with our talented and respected colleagues, and I want to thank them for their hard work, achievements and dedication.”

“We have taken every possible action to avoid job losses up to this point. We have scaled back capacity to match demand, deferred new aircraft deliveries, suspended non-essential spend, implemented a recruitment freeze, executive pay cuts and two rounds of Special Leave Schemes.

“But in spite of these efforts, we continue to burn HK$1.5-2 billion cash per month. This is simply unsustainable. The changes announced today will reduce our cash burn by about HK$500 million per month.

“We have studied multiple scenarios and have adopted the most responsible approach to retain as many jobs as possible. Even so, it is quite clear now recovery is going to be slow. We expect to operate well under 25% of 2019 passenger capacity in the first half of 2021 and below 50% for the entire year.”

Final thoughts

This won’t be the last of downsizing by airlines, but it’s definitely saddening that yet another international airline is now forced to shed jobs and staff in a bid to stay afloat.

Cathay Pacific has earlier this week predicted that it will reinstate no more than 50% of its capacity by the end of 2021, and this will certainly mean that the network will be significantly reduced.

If anything, the cessation of Cathay Dragon may be the silver lining for the airline group in this pandemic.

By dropping the regional carrier, Cathay Pacific may be able to clearly segment their destinations between the mainline carrier and its budget arm HK Express, which may work out better for the group in terms of cost efficiencies and customer offering.

The regional carrier role of Cathay Dragon has long been questioned, given that the offering was similar to what is already on Cathay Pacific, making customers and investors wonder why there’s a need for two separate brands.

Singapore-Hong Kong leisure travel bubble to commence ‘soon’

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No quarantine required, but pre-trip Covid-19 tests and booking of ‘dedicated flights’ required if you want to go

In a surprise move, Singapore newly-minted Transport Minister Ong Ye Kung announced on Thursday (15 Oct) that it has confirmed a travel arrangement with Hong Kong to allow ‘general travel’ for residents between both countries.

The most salient point of this agreement is that there will be “no restrictions on travel purpose”, effectively making this the first leisure ‘green lane’ for Singapore and Hong Kong residents, since the COVID-19 closed most borders this year.

Travellers will be subject to Covid-19 PCR testings that are recognised by both governments, but will not need to serve any isolation requirements nor be subjected to movement restrictions under ‘controlled itineraries’. Travellers can also only travel on dedicated flights that only serve travellers under this Air Travel Bubble (ATB) arrangement.

No firm timeframe yet

Both governments have not confirmed nor indicated any firm date to start the ATB flights. However reports have suggested that the bubble could comments in ‘weeks’, even though Hong Kong needs to go through a legislative process first.

Airlines are gearing up, but not sure which will be ‘dedicated flights’

Given the ‘dedicated flight’ requirement under the ATB agreement, you definitely shouldn’t be rushing to book any flight given that airlines will almost certainly need to no firm details of those services or the airlines involved at this stage.

At present, there are about two flights a day between Singapore and Hong Kong:

  • Singapore Airlines is currently operating a daily service,
  • Cathay Pacific operates three services a week, while they are projecting to increase this to twice daily towards the end of year, and,
  • Scoot is operating three services a week at the moment.

Since the announcement of the ATB yesterday, economy class fares on SIA has already gone up to about S$530-S$588, depending on when you want to fly.

Our sense is that all three airlines will certainly offer these ATB dedicated flights, although it remains to be seen whether that means mounting additional services on top of those already published, or converting these existing frequencies to ATB-only passengers.

In addition, it may be possible that Jetstar Asia may throw their name in the hat as well to offer ATB flights, given that low-cost carriers are already point-to-point carriers, so meeting the ‘dedicated flight’ requirement will be an easy feat by Jetstar Asia.

It’s far too early to say whether these flights will be sold at a different fare level, or whether miles redemptions will be available for these flights. After all, Transport Minister Ong Ye Kung did mention that these fares will be a ‘commercial decision’, and that there will be a quota for the number of travellers allowed on these flights per day.

Final thoughts

This might just be the first sign of light in a very long tunnel of 2020.

More importantly, the ATB, once began, will help to pave the way for similar arrangements with hopefully more countries, and giving a much needed reboot to tourism sector.

According to analysts, the reopening of this very popular air sector between the two giant Asian financial hubs will provide a financial lift to both Cathay Pacific and Singapore Airlines, in a new silver lining for the aviation sector.

In the meantime, if you really need to get some booking done to make yourself excited, why not check out the hotels in Hong Kong first?

Restaurant A380@Changi: More dates now available

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First run in two weeks’ time sold out in 30 minutes, SIA looking to add new slots

As expected, the Restaurant A380@Changi seats sold like hotcakes, with all available seats over two days snapped up within 30 minutes.

According to media reports, Singapore Airlines said it sold about half the seats on each aircraft due to social distancing, which means that only about 200+ seats are sold on each day. Interestingly, Straits Times has said that it has sold “over 900” seats for the first run, so either the newspaper has gotten the numbers wrong, or SIA has implied that it is opening up more than one aircraft for the session.

New sessions added

Given the overwhelming response, Singapore Airlines has committed to adding at least four more sessions on 24, 25, 31 Oct and 1 Nov 2020.

As 24 and 25 Oct are the original dates for the first run of Restaurant A380@Changi, it’s likely that the added sessions on those days are dinner slots instead. 31 Oct and 1 Nov on the other hand will be new dates altogether.

To meet the extended demand, SIA has opened a waitlist for those interested but didn’t manage to snag a seat on the first run.

To sign up, first navigate to the KrisShop page for Restaurant A380@Changi.

Next, click on the ‘notify me’ on your preferred cabin. Note that only business, premium economy and economy classes are left for selection, so if you wanted to dine in Suites, you are out of luck.

A window will pop up, asking you to key in for your email address.

And after that, simply wait for SIA to send you the email when booking is open.

Note that this is probably more of a ‘notification list’ rather than a waitlist, and that means that you won’t necessarily get first dips at the newly opened seats, so it pays to pay attention to your email inbox over the next few days.

I have already bought my ticket!

So if you have managed to snag a ticket… lucky you. Remember that you need to send in the supplementary details for your booking by today (13 Nov 2020). This is critical, for your access into the transit area at Terminal 3 where the event will be held.

You will also be required to make your meal selection, which you can find in the menus below:

If you prefer to look at photos, SIA has also released the following images on the meal selections:

First Class selections (photo credit: Singapore Airlines)
Business Class selections (photo credit: Singapore Airlines)
Premium economy class selections (photo credit: Singapore Airlines)
Economy class selections (photo credit: Singapore Airlines)

Final thoughts

I’m very glad that SIA has planned for additional seatings, given how popular the sale for the first run has gone. By all accounts, Singaporeans are dying to get on a plane, even one that is not taking off, and supporting the national carrier at the same time.

So if you want a second chance at this, be sure to act fast the next time round!

British Airways running 50% off award redemptions, but should you try?

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50% of the usual Avios required across all classes for all trips above 2,000 miles, for travel up to 30 Jun 2021

British Airways is now running a promotion, offering 50% off the usual number of Avios required for redemptions across all cabin classes for all trips over 2,000 miles.

This is a global offer running from now until 13 Oct 2020.

British Airways ran a similar promotion around the same time last year, but only for economy and premium economy cabins. A much smaller discount of 10% was offered for business and first class redemptions.

British Airways Boeing 777 First Class

The offer

As part of the airline’s Avios redemption sale, you will enjoy 50% off the usual Avios required for any award redemption across all classes: economy, premium economy, business and first class.

Note that the offer is only valid for BA-operated flights, codeshare and oneworld services will retain their original number of Avios required for redemption.

Bookings must be for journeys longer than 2,000 miles and travel must commence on or before 31 Jun 2021. Both one-way journeys and return trips can be booked.

Services from Singapore

Before Covid-19, British Airways operated three daily flights from Singapore – BA12 and BA16 to London, as well as BA15 to Sydney. BA12 is operated by an A380, while BA15 and BA16 are operated by its Boeing 777 jets.

At present (Oct 2020), BA is only operating BA15/16 between London and Singapore four times a week. It will ramp up to a daily service from 1 Nov with a second daily service scheduled to return from 17 Dec 2020, but these dates are subject to change.

The pre-coronavirus schedules are loaded through most of next year, although it remains to be seen whether BA will actually operate these flights.

What is the redemption rate?

British Airways Executive Club runs redemptions a little differently from many other airlines, as it has peak and off-peak redemption charts. The peak and off-peak dates are determined by BA and you can only see whether it’s peak or off-peak from the redemption engine.

Either way, below is the chart outlining the number of Avios required after the 50% discount for both peak and off-peak periods:

CabinSingapore – LondonSingapore – Sydney
PeakOff-PeakPeakOff-Peak
Economy35,000 17,50022,750 11,37520,000 10,00013,000 6,500
Premium Economy70,000 35,00045,500 22,75040,000 20,00026,000 13,000
Business105,000 52,50087,500 43,75060,000 30,00050,000 25,000
First140,000 70,000119,000 59,50080,000 40,00068,000 34,000

If you manage to snag an off-peak date, you can get a seat in first class for as low as 34,000 Avios, which is terrific value, and offers you access to some of the best lounges at Changi Airport, provided they are open by the time you travel next year.

One of the best proposition for British Airways Executive Club is that you can part pay with Avios if you run short.

Normally you will pay about 2 to 3 cents per Avios you are short of, such as below’s one-way award ticket to London from Singapore in first class:

Singapore – London first class, one-way (normal redemption rate)

However, under this promotion, you will end up paying significantly more at between 5 to 6 cents per Avios that you are short of:

Singapore – London first class, one-way (promo redemption rate)

So if you want to take advantage of this offer, make sure you have enough Avios to book the entire itinerary!

One downside of booking with British Airways is that the airline charge a pretty hefty fuel surcharge on long-haul flights. For instance, an award from Singapore to Sydney alone will set you back S$216.71 in additional fees, while a first in London will cost you S$203.37 in such fees.

Departures from London will also be hit with Air Passenger Duty (APD), and you will end up paying quite a fair bit out of pocket beside burning your Avios.

Final thoughts

This is no doubt a good offer, even though it doesn’t seem like international travel is likely anytime soon. Given such good value, some may argue that it is still worth a gamble to book a ticket if you have spare Avios lying around, or a pretty huge Citi Thank You points balance to transfer to Avios for this purpose.

However, I beg to differ on a few counts:

First, BA has stripped back all of its in-flight services due to Covid-19, and will essentially provide cold meal boxes in all cabin classes except first class since Jun 2020.

British Airways first class meal service

Dining has always been a major proposition for many travellers, especially leisure travellers, while travelling in premium cabins. If you are shelling out top miles for the topmost cabin class, you definitely want the full suite of experience and not a boxed dinner. Couple this with the fact that the first class seat on BA’s B777 is rather aged, that further reduces the attractiveness of the cabin experience.

Next, one other important aspect of flying first class is the pre-flight lounge access. At the moment, all of oneworld’s lounges at Changi Airport are closed and there is no indication when they will reopen.

First class flyers from Changi Airport typically get access to two exclusive areas: first, BA’s own lounge has a dedicated section called “The Bar Singapore” for first class passengers, while the second option is Qantas’ very own first class lounge.

Qantas has said that international flying is probably not going to happen until late 2021, so it’s unlikely that the first class lounge will reopen by middle of next year. That leaves you with a single option of BA’s own lounge, which is still pretty up in the air on its operability.

Last but not least, most importantly: entry and quarantine requirements of the destination countries.

At the time of writing, Australia is still pretty much closed off to travellers and is said to project a late-2021 reopening for tourism.

While UK no longer requires travellers from Singapore to quarantine for 14 days, the reverse is not true. Travellers who have stepped into UK will need to serve 14 days Stay-Home Notice when arriving into Singapore in a dedicated facility. For returning Singapore residents, this will also mean at least another $2,000 out of pocket for the quarantine, as well as the necessary fee for a Covid-19 PCR test.

We will be sitting this promo out, but of course, if you have some spare Avios lying around and don’t mind spending them for a gamble, why not?

Jetstar Asia expands network in October

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Jetstar will serve eight cities across Southeast Asia in October, operating over 100 flights in the month.

While the number of destinations has not increased over September, Jetstar Asia will operate more flights this month, with increases in frequency to Jakarta and Kuala Lumpur.

The eight cities it will serve in October are:

  • Cambodia: Phnom Penh
  • Indonesia: Jakarta
  • Malaysia: Kuala Lumpur, Penang
  • Thailand: Bangkok
  • The Philippines: Clark, Manila
  • Vietnam: Ho Chi Minh City

The full schedule

SectorFlight no.Days of opsDepArrFlight timeAircraft
Singapore – Bangkok^3K513Mon, Fri191020402h 30mA320
Bangkok – Singapore3K514Mon, Fri21200050(+1)2h 30mA320
Singapore – Clark*3K775Wed092013003h 40mA320
Clark – Singapore*3K776Wed140017403h 40mA320
Ho Chi Minh City – Singapore@3K556Sat085511552hA320
Singapore – Jakarta3K201Mon, Thu, Sat075509002h 5mA320
3K205#Sun200020551h 55mA320
Jakarta – Singapore3K202Mon, Thu, Sat094012402hA320
3K206#Sun21350025(+1)1h 50mA320
Singapore – Kuala Lumpur3K663Wed, Sun093510401h 5mA320
3K685Thu, Sat125013551h 5mA320
Kuala Lumpur – Singapore3K664Wed, Sun112012301h 10mA320
3K686Thu, Sat144015451h 5mA320
Singapore – Manila*3K761Tue061509503h 35mA320
3K765Sat172521003h 35mA320
Manila – Singapore*3K762Tue, Fri103014103h 40mA320
3K766Sat, Sun21400120(+1)3h 40mA320
Singapore – Penang3K675Sun151016501h 40mA320
Penang – Singapore3K676Sun171518401h 25mA320
Singapore – Phnom Penh3K593Fri132514402h 15mA320
Phnom Penh – Singapore3K594Fri152518252hA320

Notes:
*Passengers on flights to and from The Philippines will be required to wear face shields
^Flights to Bangkok will commence from 26 Oct 2020
@Flights from Singapore to Ho Chi Minh City are cargo-only flights
#Commencing 18 Oct 2020

Jetstar Fly Flexible policy

Jetstar Asia has introduced a one-time free date change for even its most basic booking. This applies for flights bought through its website between 7 Mar and 31 Oct 2020, for travel before 31 Dec 2020. However, any fare difference will need to be covered. Note that changes should be made before check-in opens.

Having said that, you should only be travelling if you are returning to your home country, or if you have pre-approval to fly. Jetstar Asia is currently not approved for transit in Singapore, so customers who wish to travel via Singapore with Jetstar will need to look for alternative arrangements.

Final thoughts

Jetstar Asia is still fairly conservative in its planning, but without feeder traffic from key long-haul partners, they will be hard pressed to fill the flights. Jetstar Asia is already looking at a much smaller footprint even after Covid-19, given that it has reduced its fleet to just 13 aircraft, down from 18.

As such, we expect Jetstar’s services to continue to remain low for the coming months, and expansion will be modest until and unless leisure travel starts resuming.