Cathay Pacific closes Dragon brand, shifts flying to budget unit HK Express

Cathay Pacific Airways, the flag carrier of Hong Kong, has been among the world's hardest-hit airlines during the coronavirus pandemic.

Forecasting a four-year recovery from COVID-19, the Oneworld Alliance carrier unveiled plans on Wednesday to shut its iconic Cathay Dragon brand and shift much of that flying to budget arm HK Express. The move, coupled with the layoff of some 24% of Cathay Pacific's staff -- or 8,500 people -- is meant to streamline and resize the carrier as it tries to weather the crisis.

The shift is the latest air travel change to greet flyers as they return to the skies. It is unclear yet how much the loss of Cathay Dragon will effect schedules, especially between Hong Kong (HKG) and mainland China. But what is clear is travelers will no longer enjoy Dragon's full-service model and instead receive HK Express' a la carte model where nearly every amenity comes at an extra fee.

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“We have taken every possible action to avoid job losses up to this point … Unfortunately, we will not survive without further measures," Cathay Pacific CEO Augustus Tang Kin told staff in an internal memo according to the South China Morning Post.

Cathay Pacific joins the growing list of airlines facing drastic restructurings because of COVID. Virgin Australia recently emerged as a dramatically slimmed down airline with a new owner after going through Australia's voluntary administration process. And Latin American carriers Aeromexico, Avianca and LATAM Airlines are restructuring in U.S. bankruptcy court.

“[The] outlook has actually gotten darker -- something I would not have believed possible just a few months ago," International Air Transport Association (IATA) director general Alexandre de Juniac said at the end of September. The organization has called on governments to continue to support airlines through the winter or face additional collapses.

Related: Cathay Pacific will end New York-Vancouver flight early in coronavirus capacity cuts

The closure of Cathay Dragon does not directly effect U.S. travelers. The airline connected Hong Kong to destinations primarily in China and East Asia, though its map reached as far west as India and east to Japan prior to the crisis.

The airline began flying as Dragonair with Boeing 737s in 1985. It became an affiliate of Cathay Pacific in the early 1990s, growing to complement its parent's long-haul flying with shorter hops into China. The airline was rebranded as Cathay Dragon in 2016.

Cathay Pacific hopes a COVID vaccine will be released and available widely enough for air travel to begin recovering in earnest by the second half of 2021 -- or beginning in July -- according to its latest investor update. Until then, however, the airline only anticipates flying about a quarter of what it flew in 2019 during the first six months of 2021.

Related: Travelers can transit through Hong Kong airport beginning in June

Prior to COVID, Cathay Pacific served eight destinations in the U.S. However, today it only offers limited flights to just three cities: Los Angeles, New York and San Francisco (SFO), according to Cirium schedules.

But even with drastic cuts unveiled this week, the carrier will not say it is out of the COVID woods yet.

Cathay Pacific "will adopt measures to ensure that it will survive the COVID-19 crisis and emerge as a more focused, efficient and competitive airline" if needed, it said in the investor notice.

Related: Global air travel unlikely to recover until 2024 as COVID remains ‘issue’ in US, elsewhere