Embattled Cathay Pacific to Slash 90% of Mainland China Flights
Embattled Cathay Pacific to Slash 90% of Mainland China Flights
(Bloomberg) -- Cathay Pacific Airways Ltd. plans to cut about 90% of its flights into mainland China and reduce operations across its entire network over the next two months, reflecting the heavy toll the coronavirus outbreak is taking on a carrier already battered by anti-government protests in Hong Kong.
The total impact across Cathay’s network will be a reduction of about 30% in capacity, Chief Executive Officer Augustus Tang said in a letter to staff and confirmed by the company. He said the outbreak has had a “very significant impact” on Cathay’s business, causing a drop in customer demand.
“These cuts are temporary for now and driven by the commercial and operational realities at the current time, as well as the projections in short-term demand,” he said, adding that further measures will be announced in coming days, without elaborating.
The outbreak in Wuhan, which has spread globally and infected more than 20,000 people, has dealt a blow to airlines in China and around the world as they suspend flights to and from a key market in a bid to control the spread of the virus.
Cathay is particularly exposed because of its base in Hong Kong and large mainland China business. It initially announced last week it would cut capacity by at least 50% on mainland routes. The virus challenge could hardly come at a worse time for the airline, which already issued profit warnings last year because protests at home put a major dent in its revenue as people steered clear of the Asian financial hub.
--With assistance from Kyunghee Park.
To contact the reporter on this story: Will Davies in Hong Kong at wdavies13@bloomberg.net
To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, Will Davies
©2020 Bloomberg L.P.
