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Dragonair to be downsized
Last Updated(Beijing Time):2006-09-29 09:34
Cathay Pacific Airways Ltd, Asia's second most profitable carrier, said it will fire about 5 percent of Hong Kong Dragon Airlines Ltd's work force after it completed the takeover of the smaller airline.

Most of the job cuts, 174, will be in Hong Kong, with 17 overseas staff also being fired, Cathay Pacific said in a statement yesterday. Cathay Pacific will transfer some Dragonair staff to its own operations and create 46 more jobs by ending a hiring freeze, it said. No Cathay Pacific workers will be fired.

Cathay Pacific paid HK$8.22 billion (US$1.1 billion) to buy the shares it didn't already own in Dragonair to expand on the Chinese mainland, as part of a wider deal that also included spending HK$4.07 billion to raise its stake in Beijing-based Air China Ltd. Dragonair, which reported a loss in the first half, will operate as a separate unit within Cathay Pacific.

"Serious surgery is required" to turn Dragonair around, said Peter Hilton, an analyst at Credit Suisse Group. "There would be some overlaps they would be able to reduce" through job cuts, he told Bloomberg News.

Cathay Pacific said it is offering those affected by the job cuts "a package that is well in excess of legal requirements" and access to an outplacement service.
Source:Shanghai Daily 
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