Cathay Pacific avoids downsizing issue: analyst

The company needs to 'be brutal in order to be kind'.

According to Maybank Kim Eng, Cathay’s business review didn’t underscore any real fundamental change and nor did it provide much details. The real issue of right-sizing Cathay was not addressed and therefore we don’t expect any reversal of fortunes in the near term. 

"The management is sidestepping the inevitable which is to downsize the business materially, in our view. Taking a look at historical examples such as Japan Airlines and Malaysian Airlines; both carriers cut significant capacity and laid off staff by more than 20%. However, both carriers evaded cessation and are now in fundamentally stronger positions. In the airlines industry, sometimes you have to be brutal in order to be kind," says Maybank Kim Eng