Cathay Pacific and its sister carrier, Cathay Dragon, will not apply for the second round of government employment subsidies, ramping up speculation that another wave of layoffs is imminent at the two Hong Kong airlines.

The government’s financial support is meant to protect jobs by mandating no retrenchments between September and November, and Cathay Pacific Airways, with its confirmation on Friday to forgo the funding for its two main business units, is effectively hinting that it may wield the axe as early as this month.

“It is inevitable we will need to right-size our airlines to address the reduced travel market” in an extremely challenging operating environment, said Andy Wong, Cathay’s general manager for corporate affairs.

The group had applied for the government’s Employment Support Scheme, made available under the Anti-epidemic Fund, for budget carrier HK Express, AHK Air Hong Kong, Cathay Pacific Cargo Terminal, Hong Kong Airport Services and Cathay Pacific Catering Services.

On the same day, chief executive Augustus Tang sent an internal memo to all staff about the government support but did not mention any redundancy action. Management would continue to explore suggestions based on the long-term interests of the company and would inform the staff as soon as a decision was made, he said.

Globally, the Cathay group had around 33,000 staff at the end of June. The Hong Kong workforce totaled 27,600, about 1,200 fewer than in end-2019. In March and June this year, 436 overseas crew members lost their jobs when the group closed all its foreign bases in the United States and Canada’s Vancouver.

Then in August, group chairman Patrick Healy said during the announcement of the company’s interim results that it was bleeding at the rate of HK$1.5 billion (US$193.5 million) a month. He cautioned that the company had been reviewing all aspects of its business model and expected to arrive at some findings in the fourth quarter.

Healy’s warning came even as flagship carrier Cathay Pacific had received HK$458 million from the government scheme for 17,700 staffers in the June-August period as part of a total of HK$680 million granted to all nine units under the group.

Talk of possible layoffs had been circulating in various WhatsApp chat groups of Cathay staffers, predicting that some people might get retrenchment notifications this month ending their employment in October.

Writing on WhatsApp, an employee surnamed Fan named a number of departments that might be at high risk of redundancy, such as those managing airport services, cabin crews and back-end duties. “There are rumors saying that the company is targeting people with years of long service, including staffers who enjoy better remuneration packages, like housing allowance.”

Ground crews at the airport could be another major target, because self-check-in facilities for passengers had decreased the need to keep a large workforce on the payroll.

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