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Thursday, Jan 28, 2021

Hong Kong carrier Cathay Pacific and subsidiaries draw HK$680 million from government’s coronavirus relief fund

Employment Support Scheme payout will sustain at least 25,881 jobs at the group, which has been struggling through Covid-19 pandemic. Other new beneficiaries from the huge bailout include KMB, Jones Lang LaSalle Management

Hong Kong’s embattled flag carrier Cathay Pacific has won some breathing space as the airline and its subsidiaries, which include cargo, frequent flier and laundry businesses, were among the latest recipients of government support, receiving about HK$680 million (US$87.7 million) from the Covid-19 relief package.

The amount could keep afloat the jobs of at least 25,881 of the group’s employees.

The names of the fourth batch of companies granted the government wage subsidies under the Employment Support Scheme, a bailout for businesses to tackle the economic recession triggered by the pandemic, were made public on Tuesday.

Recipients ranged from small firms to big names such as Cathay Pacific, KMB, Jones Lang LaSalle Management and Kai Shing Management Services, a subsidiary of Sun Hung Kai Properties.

“The name list … covers about 11,000 employers. These employers have received wage subsidies totalling about HK$6.27 billion [US$809 million] and have committed to maintain a total paid headcount of about 270,000,” the government said in a statement.

Among the latest batch of companies, Cathay Pacific Airways took up the biggest share with subsidies of about HK$458.2 million, involving 17,703 employees. Its subsidiary Hong Kong Dragon Airlines received HK$69 million, centred on 2,581 workers, while another wing, Hong Kong Airport Services, got about HK$70.8 million, with 2,624 workers.

Cathay Pacific Catering Services received about HK$43.9 million for its 1,590 workers. Another HK$17.3 million went to Cathay Pacific Services, involving 646 workers.

With another three subsidiaries benefiting, Cathay pocketed a total of HK$679 million in wage subsidies, involving 25,881 employees.

The city’s biggest airline is embracing a restructure to survive the economic slump caused by the Covid-19 pandemic, fresh from unveiling a HK$39 billion bailout (US$5 billion), of which HK$27.3 billion will come from the government.

During the pandemic, Cathay saw its daily passenger numbers collapse 99 per cent, forcing the grounding of most of its passenger planes.

Most staff were made to take pay cuts and the company is working through a major restructuring of the organisation for the second time in four years. The airline has been losing up to HK$3 billion a month since February.

Hong Kong’s flag carrier was already hit hard by the anti-government protests sparked in June 2019 by the now-withdrawn extradition bill.

The other beneficiaries of the scheme included bus giant KMB, which pocketed about HK$324 million for 12,590 employees. Real estate and investment consultancy Jones Lang Lasalle Management Services received about HK$119 million, with 4,804 workers.

And Kai Shing Management Services, a member of Hong Kong’s leading developer Sun Hung Kai Properties was also granted HK$136.6 million, covering 5,780 workers.

The government spokesman said the disbursement of wage subsidies to another batch of some 9,000 successful applicants had kicked off on Tuesday.

While not all names have been published, the government said that in total, five batches of about 110,000 employers had already received wage subsidies, covering about 1.3 million employees, totalling some HK$29.5 billion.

Meanwhile, the government said it had so far received 115 reports or complaints against employers who still cut staff or pay despite receiving the subsidies.

Seventeen of the cases were referred to the Labour Department and one was referred to the Customs and Excise Department, according to authorities.

Local developer Hang Lung Properties said it had decided not to apply for the government wage subsidy.

Board chairman Ronnie Chan Chi-chung said: “The board is of the view that the government money is for those businesses in need.

“Although our business has also been greatly impacted, and HK$60 million is also a big sum, the financial situation of the company is good and we decided not to apply.”


Quote of the Day

A business that makes nothing but money is a poor business.

Henry Ford
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