Saturday, April 18, 2009

Cathay Pacific cuts flights

The chief executive, Tony Tyler, said in a statement that a “toxic combination of low fares, a big drop in premium travel, weak cargo loads, poor yields and a negative currency impact" had made it more important than ever to preserve cash.

"Our staff are being asked to make sacrifices that will be needed to see the company through this violent storm," he said. "The pain will be shared from the top down."

Mr Tyler said the company had no option but to take the measures if it wanted to maintain the long-term sustainability of the business.

The airline said that all staff would be asked to take up to four weeks of unpaid holiday in the coming 12 months. It will also cut services to major destinations across Asia and in Europe.

Cathay Pacific said it would make ad hoc cancellations of 17 round flights to London in May, with more likely in June, and cut its twice-daily service to Paris to one flight a day from September.

It will also reduce flights or capacity to Paris, Frankfurt, Sydney, Singapore, Bangkok, Seoul, Taipei, Tokyo, Mumbai and Dubai.

Its China-focused unit Dragonair will suspend flights to Fukuoka, Dalian, Shenyang, Guilin and Xian while reducing flights to Shanghai, Bengaluru, Busan and Sanya.

A few weeks ago the Hong Kong carrier reported its first full-year loss in decade, due to the global slowdown and hedging bets on fuel prices that went wrong.