Hong Kong Airlines (HX, Hong Kong Int'l) has laid off almost two-thirds of its workforce in the wake of severe capacity cuts, making them redundant if they had not already relented to accepting significant pay cuts to keep their jobs.

The long-troubled carrier had urged staff in a leaked internal memo on June 9 to accept a voluntary scheme of six months’ leave in exchange for one month’s pay, or nine months off with two months’ pay, warning that otherwise they may be dismissed altogether.

Of Hong Kong Airlines’ 2,100 employees, 60% either lost their jobs or took the pay cut, with most of the cutbacks being among the airline’s cabin crew, local media reported. In its redundancy letters, the airline - part of China’s bankrupt HNA Group - repeated its objective to having to reduce operating capacity.

On June 24, it confirmed about 700 redundancies. This followed an announcement of 240 layoffs one week previously, mostly among ground services personnel. Layoffs began on June 23. It also said that salary cuts for senior executives for the second half of 2021 had been expanded from 15% to 36%, depending on their pay grade.

According to the company, employees had responded “enthusiastically” to the voluntary paid leave scheme, and around 600 employees had been approved to take it. The company said it was in severe survival mode. The most urgent task was to make it more streamlined and more efficient, merging departments and integrating work responsibilities to protect its future.