The restructuring will stem the cash burn by HK$500 million a month in 2021, the airline said, adding executive pay cuts would continue throughout next year.

The Cathay chief executive had warned in a September interview with China Daily that a net cash outflow will continue in the short term even after the restructuring has been completed.

"The cash burn will continue to be significant until the number of passengers returns to a certain level," Tang said in the interview, adding that he didn't have a target for the passenger numbers.

The decision to end regional brand Cathay Dragon is in line with rival Singapore Airlines Ltd's pre-pandemic move to fold regional brand Silkair into its main brand.

In the short-term, the closure of the Cathay Dragon brand will result in it being unable to carry cargo to Fuzhou, Guangzhou, Kuala Lumpur and Fukuoka, and it will only send dedicated freighters to Xiamen, Chengdu and Hanoi, it told cargo customers in a memo, indicating the routes were cut for now.

Cathay Dragon, once known as Dragonair, operated most of the group's flights to and from the Chinese mainland and had been hit by falling demand before the pandemic due to widespread anti-government protests in Hong Kong.

Cathay shares, which have fallen 41 percent since the start of January, jumped as much as 6.6 percent in early trade Wednesday before closing up 2.3 percent.

The airline's share register is dominated by Swire Pacific Ltd, Air China Ltd, Qatar Airways and the Hong Kong government, with only a 12 percent free float.

Luo Weiteng contributed to this report