Cathay Pacific said on April 17 it will slash flights and ask staff to take unpaid leave as the Hong Kong airline reels from a crisis it says has hit harder than the SARS outbreak and the September 11 attacks.
The carrier announced a 22 percent drop in first-quarter revenue, just weeks after it said it had lost more than a billion US dollars in 2008, the company's first full-year loss in a decade. It blamed the losses on a demand slump triggered by the global slowdown as well as soured fuel hedging bets devised when prices were high before the slowdown kicked in.
"SARS was more dramatic in terms of revenue but it had a finite end and when it did we recovered quickly because the economy was quite strong - 9/11 was a similar thing," chief executive Tony Tyler told a press conference. "The problem with this one is there is no visibility on how long this will last and that makes it more challenging than anything I have experienced."
The September 11 attacks on the United States in 2001 left thousands dead and ravaged the global aviation industry for months. Severe Acute Respiratory Syndrome (SARS) killed 299 people in Hong Kong when it struck in 2003, battered the city's economy and led to a plummet in its key tourism industry forcing Cathay to issue its first ever profit warning. One of Asia's biggest carriers, it said all staff would be asked to take up to four weeks of unpaid holiday in the coming 12 months.
"Our staff are being asked to make sacrifices that will be needed to see the company through this violent storm," Tyler said in a statement released ahead of the press conference. "The pain will be shared from the top down." Tyler said he and other executives would be signing up to the scheme, although they wouldn't be taking their time off.
"If the market deteriorates we will have to do more, that's obvious," he told reporters. "Perhaps we are about to turn the corner to the Promised Land but I see no sign of it," he added.
The airline said first-quarter revenue from passenger and cargo services fell 22.4 percent year-on-year. "The last crises were passenger crises but cargo was strong," chief operating officer John Slosar said.
The company will make ad hoc cancellations of 17 round trips 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 Frankfurt, Sydney, Singapore, Bangkok, Seoul, Taipei, Tokyo, Mumbai and Dubai.