One of Asia’s biggest airlines Hong Kong airline Cathay Pacific Airways has offered the government help fund a 39 billion Hong Kong dollar ($5 billion) recapitalization plan to help it endure the coronavirus pandemic.
According to details, Cathay Pacific said the plan calls for it to issue shares to raise more than 33 billion Hong Kong dollars (over $4.3 billion).
Of that total, about 20 billion Hong Kong dollars ($2.6 billion) would be issued to a new, government-controlled group to be called Aviation 2020.
The airline also would receive a 7.8 billion Hong Kong dollar ($1 billion) loan from Aviation 2020.
Financially unstable Cathay Pacific, proposed the bailout as it strives to survive the near-collapse of regional travel due to the coronavirus pandemic.
Political pressures from China also led to the resignation of Cathay Pacific’s CEO Rupert Hogg after some of its employees were found to have joined the protests.
The airline said the plan was in response to the outbreak of the global COVID-19 pandemic which has created significant challenges for the airline industry.”
The company said it plans executive pay cuts and a second voluntary leave scheme for employees on top of earlier cost-cutting measures.
In the first four months of the year, the number of passengers carried by Cathay Pacific plunged nearly 65% amid a halving of capacity.
The airline has been operating a network of flights to major destinations such as Singapore, Beijing, Los Angeles, New York and Tokyo.
Cargo measured by weight fell nearly 27% in the first four months, against about a 25% decrease in capacity, the airline said.