Hong Kong Airlines to cut 400 jobs, ask employees to take unpaid leave: SCMP

(Reuters) – Hong Kong Airlines will slash 400 jobs as the coronavirus outbreak adds to financial troubles for the carrier, the South China Morning Post reported on Friday, citing two sources familiar with the plan.

The airline, controlled by cash-strapped Chinese conglomerate HNA Group [HNAIRC.UL], will also ask its remaining staff to take at least two months of unpaid leave, SCMP said.

The newspaper reported the majority of job cuts were set to fall on pilots and cabin crew and staff have also been warned on the possibility of more roles being cut as it shrinks operations.

Hong Kong Airlines plans to cut its daily operations from 82 flights to just 30, from February 11 into March, SCMP reported.

A representative from Hong Kong Airlines did not immediately respond to a Reuters request for comment.

Several airlines have suspended flights to China in the wake of the new coronavirus outbreak, which has infected more than 31,000 and claimed 636 lives so far in mainland China.

Earlier this week, Hong Kong Airlines’ larger rival Cathay Pacific Airways (HK:) asked its employees to take three weeks of unpaid leave, saying preserving cash was key and that conditions were grave as during the 2009 financial crisis due to the virus outbreak.

Both Cathay and Hong Kong Airlines have already been grappling with a sharp fall in demand since the middle of last year due to widespread, sometimes violent anti-government protests in Hong Kong.

Hong Kong Airlines was struggling financially even before anti-government protests. In December, the carrier was forced to draw up plans to raise money and maintain cash levels as it faced the possibility of a license suspension by the city’s air transport regulator.

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