The Hong Kong government has appointed two observers to the board of Cathay Pacific Airways, as part of its bailout plan for the Chinese special administrative region's flag carrier. Carlson Tong and Rimsky Yuen joins the board as observers with immediate effect, the government said in a 14 July statement. "Mr Tong has been active in public and community services and possesses extensive knowledge and significant experience in the financial services sector. He was a board member of the Airport Authority Hong Kong and is familiar with the operation of the Hong Kong aviation industry," says Hong Kong's financial secretary Paul Chan. "Mr Yuen is a seasoned legal expert in commercial and civil matters with vast experience in public services and administration. They are suitable candidates to serve as observers to the Cathay Group's board. I am confident that they will help safeguard the government's investment interest in the Cathay Group." Yuen was the city's secretary for justice from 2012 to 2018, and is currently a member of the Exchange Fund Advisory Committee, the investment arm of the Hong Kong Monetary Authority, the city's de facto central bank. Tong served as the chairman of the city's Securities and Futures Commission from 2012 to 2018, and was a member of the Exchange Fund Advisory Committee from 2010 to 2020. He was a board Member of the Airport Authority Hong Kong since 2017 until he left the post in July 2020. In their new roles, Tong and Yuen have the right to receive notice of Cathay's board meetings, attend and speak at all meetings of the board, receive information ad papers distributed by the board, and have access to management and to all information about the company. However, they have no voting rights at board meetings. In June 2020, the Hong Kong government decided to invest HK$27.3 billion ($3.52 billion) in the Cathay Group through its Land Fund, comprising preference shares with detachable warrants of HK$19.5 billion and a bridge loan of HK$7.8 billion. It made the move "with a view to upholding Hong Kong's status as an international aviation hub amidst the threat arising from Covid-19", according to yesterday's press release. As part of that investment agreement, the government may designate two observers to the Cathay Group's board of directors, until the airline repays the government in full for the drawn bridge loan and interest and redeems all preference shares from the government. In a statement sent to Cirium, Cathay said it welcomes the appointment of Tong and Yuen and looks forward to working with them "closely".

WAGE SUBSIDIES Meanwhile, Cathay and seven of its subsidiaries have received nearly HK$680 million in wage subsidies as part of the government's Employment Support Scheme (ESS), according to government data made public yesterday. The funds support the salary payments of nearly 26,000 employees. It is not clear why the flag carrier was not included in the first round of ESS subsidies, which were released in June and included the Hong Kong entities of foreign carriers like Taiwan's China Airlines and EVA Air, as well as mainland Chinese carrier China Southern Airlines. Under the ESS scheme, the government will pay 50% of the actual wages paid to each "regular employee" in the specified month. The maximum monthly wage subsidy per employee is HK$9,000. Mainline carrier Cathay Pacific Airways received over HK$458 million for its 17,703 staff, while regional carrier Cathay Dragon got over HK$69 million for its 2,581 staff. Cathay's catering company got nearly HK$44 million for its 1,590 staff, while Cathay Pacific Services, which has a 20-year franchise from the Airport Authority Hong Kong to operate a cargo terminal at Hong Kong International Airport, got over HK$17 million for its 646 staff. Ramp and ground handling company Hong Kong Airport Services got over HK$70 million for its 2,624 staff. Among the other subsidiaries to benefit was Cathay's laundry business, Vogue Laundry Service, which according to Cathay's website services more than 27 airlines, as well as 35 hotels, clubs and institutions.The group's loyalty programme, Asia Miles, also received nearly HK$3.4 million for its 123 staff.

Source: Cirium

Etihad Airways has teamed up with private hospital group Mediclinic Middle East to offer its UAE-based passengers a Covid-19 testing service that can be carried out in their own homes prior to travel. After booking a flight with the Abu Dhabi-based carrier, travellers can contact Mediclinic and arrange for a PCR swab test to be carried out either in their homes or at a Mediclinic facility. Test results will come back within 24h. Passengers who test negative for Covid-19 can print their test result and take it with them when they check in for their flight. In the event of a positive result, travellers will not be permitted to travel and must follow UAE quarantine guidelines. They can then rearrange their flight for a future date. Etihad recommends that testing is carried out at least 48h prior to departure. The airline says it will "evolve the relationship with Mediclinic to further simplify the home-testing process" as more countries open their borders to international arrivals. "Enabling home PCR testing will remove much unnecessary stress from the travel experience during this challenging period," states Dr Nadia Bastaki, vice-president of medical services at Etihad. The Gulf airline is the latest aviation company to implement or talk about implementing a coronavirus testing programme for passengers. In April, Emirates declared itself the first operator to carry out Covid-19 blood tests on passengers when it tested travellers ahead of a flight to Tunisia. Lufthansa announced in late June that it had joined forces with Fraport and disease diagnostics company Centogene to provide an onsite coronavirus testing facility at Frankfurt airport. London Heathrow is looking to do a similar thing and has called on the UK government to allow it to host a Covid-19 test-on-arrival programme as an alternative to requiring passengers from high-risk countries to quarantine for two weeks.

Source: Cirium

American Airlines intends to notify pilots this week of potential layoffs, a move coming after executives estimated the airline may need to cut some 1,500 pilot jobs. In a 10 July weekly message to pilots, American managing director of flight line operations Chip Long said layoff warnings will come in the form of notices required under a federal law. “Our expectation is that… notices will be sent next week. Our hope is to very soon engage with [the Allied Pilots Association] and explore every opportunity to take care of our pilots while taking care of our airline,” Long said. Under federal law airlines must notify employees at least 60 days prior to a pending mass layoff. The Allied Pilot Association (APA), which represents some 15,000 American pilots, tells FlightGlobal it has not held formal discussion with American’s managers about layoffs. However, the union worked with the airline this year to implement voluntary leave and early retirement programmes. About 800 pilots have retired early and some 4,500 have taken temporary leaves, which come with partial pay, APA says. American’s ability to trim its workforce is limited until 30 September under the terms of financial aid taken via the US government’s coronavirus relief bill. The airline declines to comment about potential job cuts, which are suspected to hit a broad swath of employee groups. American has already said it was cutting 30% of management and administrative jobs. More information may be available this week, American adds. On 24 June, American chief executive Doug Parker gave employees an idea of the scope of cuts. American’s unionised workforce is “at least” 30% larger than the airline will need in October, and 15-20% larger than it expects to need in July 2021, Parker said during a monthly pilot meeting called “Crew News”. He called the 15-20% range relevant to American’s pilots because, due to training lead times, American must base pilot staffing on long-term workforce projections. Specifically, Parker and another executive said American may need to cut 1,500-1,600 pilot jobs. It doesn’t make much sense at all to reduce pilot staffing by 50% if you… need to be at 80% in six months,” he says. Dennis Tajer, head of APA’s communications committee, cautions that airlines that cut too many pilots could struggle to rebound when the industry rebounds. “Every airline… has to be very careful not to trim the ranks too aggressively,” he says. “Airline management teams who focus on where the puck is versus where the puck is going will risk being put on ice during the recovery.”