HK government to lead Cathay bailout package

The Hong Kong government is set to lead a 5 billion US dollar (HK $39 billion) bailout package for Cathay Pacific Airways.

The airline announced the deal on Tuesday (June 9), which will also give the government two observer seats at Cathay's board meetings.

Cathay is one of many airlines struggling worldwide due to the plunge in travel demand.

It has already grounded most of its planes, and on Tuesday it said their passenger revenue had fallen to just 1% of the previous year's levels.

That means the airline has been losing nearly 400 million dollars (HK $3 billion) a month since February.

For now it's only flying a skeleton passenger network to major destinations such as Beijing, Los Angeles, Sydney and Tokyo.

Cathay has taken to furloughing some pilots and cutting some cabin crew roles overseas, but it has not announced large-scale permanent job losses.

The airline added that it would put in place another round of executive pay cuts and a second voluntary leave scheme for employees.