Cathay Pacific Airways has announced that all the necessary approvals and conditions relating to the shareholding realignment involving Cathay Pacific, Air China, China National Aviation Company (CNAC), CITIC Pacific and Swire Pacific have now been completed. With immediate effect, Hong Kong Dragon Airlines (Dragonair) becomes a wholly owned subsidiary of Cathay Pacific.
Dragonair will become part of the Cathay Pacific Group but will retain its separate brand, market positioning and identity. Work will begin to maximise the synergies and opportunities that arise from linking Cathay Pacific's international network with Dragonair's extensive Mainland services, bringing significant long-term benefits to both carriers and helping to further cement Hong Kong's position as a leading international aviation hub.
Cathay Pacific Chief Executive Philip Chen said: "This is an important day for both Cathay Pacific and Dragonair that marks the culmination of two years of complex negotiations. It was a result well worth waiting for. We can now welcome Dragonair staff into the greater Cathay Pacific family as we forge ahead as partners in building what has the potential to become a great force in aviation.
The restructuring will result in 174 job losses at Dragonair in Hong Kong among office staff from various departments. In addition, 17 staff in overseas offices will also be affected. In total, this represents about 5 per cent of the total Dragonair workforce. Every effort has been made to keep job losses to a minimum and those affected are being offered a package that is well in excess of legal requirements. A job outplacement service will also be made available to Dragonair staff affected by the changes.
As well as bringing Dragonair into the Cathay Pacific family, the shareholding restructuring will also result in a much closer partnership between Cathay Pacific and Air China, with the two airlines increasing their cross-shareholding and beginning work to increase co-operation in a number of key areas. The linking of Cathay Pacific, Dragonair and Air China will bring significant benefits to the Hong Kong and Beijing hubs and aviation in the region generally.
Source: Cathay Pacific
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