Cathay Pacific in cost-cutting mode
21 Apr 2009
Meanwhile, Hong Kong's Cathay Pacific Airways is undertaking a series of cost-cutting measures to help it deal with a drop in business, resulting from the current economic downturn.
The airline will reduce passenger capacity by 8 per cent and that for overall cargo to 11 per cent from May, the airline said in a statement.
At the same time, in a further effort to reduce spending the airline will introduce a four-tier, top down special leave scheme under which staff will be asked to take unpaid leave varying from one to four weeks according to their seniority.
"We anticipate an extremely challenging year in 2009 with a toxic combination of low fares, a big drop in premium travel, weak cargo loads, poor yields and a negative currency impact,'' Cathay Pacific chief executive Tony Tyler said.
According to Tyler, turnover for the first three months of this year, was 22.4 per cent lower compared to the same quarter of 2008.
Cathay Pacific's sister airline, Dragonair, will see a 13 per cent cut in capacity. Dragonair, in an effort to contain costs and preserve cash, will reduce passenger capacity by 13 per cent from May.
Effective June 1, services to Bangalore, Busan, Sanya and Shanghai will be reduced, while all flights to Fukuoka, Dalian, Shenyang, Guilin and Xian are suspended.
Cathay Pacific lost more than $8.2 million in 2008 - a record annual loss for the airline. This year, first-quarter earnings were down more than 22 per cent, compared to last year.
The International Air Transport Association says the airline industry is facing one of its toughest years ever and that Asia-Pacific carriers may be hardest hit.
Last week, flag carrier Air China reported a loss of $1.4 billion in 2008. China Eastern, the third-biggest airline in China, says it lost $2.2 billion, last year. Australia's Qantas plans to cut an additional 1,750 jobs, after eliminating 1,500 last July.
