Cathay Pacific restructuring looms amid increasing competition

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Hong Kong-based Cathay Pacific Airways is to review its organizational structure and effect a massive revamp, cost reduction, and job layoffs in response to a stronger competition and increased global economic volatility.

It said that “there is a need for an organisational structure that will allow Cathay to succeed.”

“We need a leaner, simpler structure that is driven by real insights into our customers and their needs and one that will allow us to respond quickly to change.”

The airline further stated: “2017 is going to be a year of significant change and an opportunity to better align our business with the increasingly competitive aviation landscape.”

The company in an emailed statement added that the changes will start at the top. “We will reorganise ourselves with clear focus on seven key areas in order to speed up decision making and make Cathay more responsive to our customers’ needs.”

New portfolios will be established with redefined responsibilities and accountabilities in the areas of customer service, operations, commercial aviation, and people.

“Each portfolio team will work on structural changes to improve effectiveness in their own areas of responsibility over the months ahead, with a plan to implement key changes by mid-year,” said Cathay Pacific.

There will be a second round of organizational change that will see the creation of shared services within the company. “This will consolidate core activities across different functions and help us to streamline and standardise processes,” it continued.

“This change will create opportunities, but some jobs will no longer be needed. Some new jobs will be created and other jobs may be redefined. There will be more change in some areas than others and overall the work will involve a holistic review of how our business is structured—something of this scale hasn’t happened for more than 20 years.”

“The changing and increasing customer expectations, the dramatic growth of competition, the unpredictable nature of the world economy and a host of other factors have combined to put huge pressure on our business. The competition is here to stay and the uncertainty is ‘the new normal’—we simply must respond,” the airline further said.

Cathay is locked in competition with aggressive mainland Chinese carriers and faces a growing threat from Middle East airlines, and has to deal with the “open skies” deal signed last month between China and Australia.

Photo: ltdccba