Cathay Pacific has rounded off a cruel week for aviation by announcing that it is reducing capacity and asking staff to take unpaid leave as both passenger and cargo divisions continue to slide sharply.
Revenue from passenger and cargo fell 22.4 percent in the first quarter compared to last year. The Hong Kong carriers said it plans to cut passenger capacity by 8 percent from next month, whilst its China offshoot Dragonair will undergo a 13 percent cut. Cargo will be reduced by 11 percent.Its global workforce of 27,000 will also be asked to take unpaid leave over the next 12 months. The move will come as a particularly bitter blow in Hong Kong where Cathay is one of the island’s biggest employers.
“Our staff are being asked to make sacrifices that will be needed to see the company through this violent storm,” chief executive Tony Tyler said. “The pain will be shared from the top down.”
The staff will be asked to take up to four weeks off unpaid.
The announcement came just weeks after Cathay said it had lost more than a billion US dollars in 2008, its first full-year loss in a decade, due to the global slowdown as well as wrongly hedging on fuel prices.
Cathay is expected to make the biggest route reduction between Asia and Europe, with 17 weekly service to London going, as well as its twice-daily Paris service shifting to one. It will also reduce flights or capacity to Frankfurt, Sydney, Singapore, Bangkok, Seoul, Taipei, Dubai, Tokyo and Mumbai.
Cathay’s union of flight attendants acknowledged the carrier, an iconic brand in the southern Chinese city, was facing trouble.
“We are willing to lend a hand during these difficult times,” union chairwoman Becky Kwan told AFP.
Earlier this year the airline shelved plans to build a new cargo terminal at Hong Kong International Airport for two years.