This time around, as things turn down there are however three new features: one, this downturn is global and there are few if any pockets of hope; secondly, they have ramped up reliance on a premium traffic market which is now slumping to an extent that could not have been imagined a year ago; and thirdly, their reliance on Asian markets has grown significantly, even since the 2003 SARS outbreak.

This latter feature is hurting both carriers. Singapore Airlines, reporting its Nov-08 traffic results today, for example showed a cargo load factor reduction of a whopping 13.1 percentage points for “East Asia” routes. This compares with an overall equivalent fall of 4.2 percentage points for all routes.

Cathay, whose reliance on the Chinese market is greater (but does not break out regional cargo results), shed 15.4 percentage points on cargo loads. Cargo markets are tanking as high value exports decline. As Cathay Pacific General Manager Cargo Sales and Marketing, Titus Diu, said last week, “November is traditionally one of the busiest months in the airfreight business but this year the peak simply didn’t happen.”

The outlook is not good either for this sector. As IATA reported last week in its global review for 2009, “with 45% of the global cargo market, the (Asia Pacific) region’s carriers will be disproportionately impacted by the expected 5% drop in global cargo markets next year.” (And, ominously, Director general, Giovanni Bisignani went on, “Air cargo comprises 35% of value of goods traded internationally. The 7.9% decline in October is a clear indication that the worst is yet to come – for airlines and the slowing global economy.”)

But Singapore Airlines has to date been much restrained in its capacity expansion than Cathay and it is here that the difference in performance shows. Cathay is talking of grounding several of its freighters as its greater exposure there has bitten deep already. But the bigger contrast is in capacity growth on the passenger deck that is making a difference.

Cathay went on an order binge over recent years, while Singapore has managed, at least so far, to contain its expansion. For most of 2008, Cathay’s passenger capacity levels have been up by around 15% year on year. Singapore has managed to keep its increase down to more manageable levels.

Despite similar numbers of new aircraft seats entering their fleets, Singapore has apparently managed the process better, either grounding or redesigning flight patterns to reduce utilisation.

This disparity – and the decline in passenger loads since Asia recognised that it was not “decoupled” from the world’s economy – can be seen in the respective load factor showings of the two carriers. In the early part of the year, Cathay was able to maintain load factor increases, despite adding 10% and more of capacity year on year.

But, as the economy deteriorated and Cathay’s capacity kept rolling in, this equation quickly changed. Meanwhile, despite its lower expansion of seat numbers, Singapore Airlines’ passenger load factors have bumped along in negative territory all year, but are not experiencing the steeper decline of Cathay.

There is one other closely linked variable: yields. Airlines are understandably reluctant to publish any more than local requirements force them to – and even then reports tend to be somewhat opaque.

To some extent, the Asia Pacific market, along with others, has been carried along on the previous year’s optimism. Once the new year turns, the indications from forward bookings are that either a lot more capacity will be grounded (unlikely while fuel prices remain low) – or that yields will decline across the board.

Already Qantas has effectively dumped a lot of its first half 2009 premium capacity in the market with its two-for-one offers.

The race to get seats out there first could be on after midnight on 31 December, as a year ends that most will prefer to forget. Hopefully 2009 will be a year to remember, for all the right reasons.

Two junior colleagues spotted Kwong, who had worked for Cathay Pacific for 23 years, and reported her to the captain. She resigned and was prosecuted for theft.

The total value of the goods she pilfered was only about 130 US dollars, the Tseun Wan court was told Friday, according to the South China Morning Post.

Kwong told the court she stole the goods while suffering from exhaustion because of the effects of medication, and hadn’t slept in 33 hours. Sentencing was adjourned till December 30.

Pilots on the airline, which earlier this year recorded its first operating loss since 2003, are also being offered unpaid leave with immediate effect as routes are trimmed.

However, the powerful Flight Attendants Union, which represents the majority of the airline’s cabin crew, Wednesday warned its members not to accept any unpaid leave.

In a circular to its members, the union warned that flight attendants’ bonuses, retirement funds and other entitlements would be adversely affected if they took unpaid leave.

“Unlike during (the 2003) SARS (crisis), the company has not negotiated with the union reasonable terms when offering unpaid leave this time,” the circular said.

“The terms are so harsh that it is as if you are begging to let them help you help them, or you are allowing yourself to be double punished for helping them out.”

Titled “10 reasons why you should not take unpaid leave,” the circular concluded: “If there really is a surplus of crew or the company is going to reduce flight frequencies, we will all get more time off on full pay if we don’t take unpaid leave.”

In a memo to staff last week, Cathay Pacific said unpaid leave was being offered “as a result of the reduction in planned passenger capacity growth”.

The memo said leave was being offered on a voluntary basis only and stressed: “The airline will ensure it has sufficient crew for operational needs at all times.”

Cathay Pacific has thousands of employees worldwide and last year carried 23.5 million passengers and 1.6 million tons of cargo.

In a statement, the Hong Kong-headquartered airline said the measures were cutting back on planned passenger capacity growth in 2009; offering cabin crew and cockpit crew the opportunity to take voluntary unpaid leave.

It was also parking two Cathay Pacific freighters and requesting a deferral on the construction of the Cathay Pacific Cargo Terminal in Hong Kong. “The airline is paring back its earlier projection of 6-7% growth in capacity in 2009 to less than 1% to reflect the anticipated decline in demand. Services on some routes will be adjusted accordingly though the airline is clear that it plans to keep its network integrity intact and not cut any destinations,” it said.

Cathay Pacific Airways said the new capacity figure took into account the airline’s previously announced decision to remove five Boeing 777-200 aircraft from its fleet and also covered delays in the deliveries of new aircraft as a result of the recent strike at the Boeing factory in Seattle. Due to the reduction in planned passenger capacity growth, the airline would offer a voluntary unpaid leave scheme for its cabin crew and cockpit crew. The 2009 scheme for cabin crew will come into effect on Jan 1 and would offer periods ranging from two weeks to a maximum of 12 months.

The airline said the financial crisis was having a particularly severe impact on its airfreight business as several of the world’s major economies head into recession.

It would park two Boeing 747-400BCF freighters at Victorville, California, for a year with effect from January 2009.

As for regionally, it added there would be no significant changes to scheduled freighter schedules, though there will be some frequency reductions to Australia, North America and Europe.

The airline will receive four more new Boeing 747-400 Extended Range Freighters in 2009 though the delivery of its new Boeing 747-8Fs will now only begin in 2010. Cathay Pacific Airways said it had also submitted a request to defer construction of the new Cathay Pacific Cargo Terminal at Hong Kong International Airport by up to two years in a move to keep capacity expansion in line with market growth, and to reduce its capital expenditure in 2009 and 2010.

“Discussions are taking place with the Airport Authority and no further details can be given until these are concluded.

“Preliminary work has already begun on the HK$4.8bil facility, which was originally scheduled to begin operation in the second half of 2011,” it said.

High Court judges Michael Hartmann and Michael Lunn overturned a decision against the airline by the privacy commissioner, and remitted the case to the commissioner for fresh consideration.

Privacy Commissioner for Personal Data Roderick Woo Bun said he was disappointed with the judgment, insisting the commission had come up with a right decision.

The privacy commissioner had earlier found Cathay acted “unfairly” by asking staff with high records of absence to supply evidence of their medical condition and ordered the company to halt the practice.

However, Woo said he is unsure if he will challenge yesterday’s ruling.

The judges said both the commissioner and the Administrative Appeals Board had based their findings on an “incorrect construction” of the true meaning and intent of the Personal Data (Privacy) Ordinance, which says personal data may be collected by lawful and fair means.

The judges said the commissioner must have taken into account that Cathay has a duty in law to monitor the health of its cabin crew and that the collection of medical data sprung directly from that duty and the data sought was not excessive.

“More than that, he [the commissioner] would also have taken into account that the means employed were lawful.

“How then was it, in the light of such circumstances, that
the commissioner came to the
conclusion that the means of collection were unfair?”

The judges also cited an example of workers in a nuclear power station who may be asked to attend regular medical checks and to disclose the results to ensure they are not contaminated by radiation to protect both the interest of the employee and the public.

Equally, the airline is under an obligation to ensure all cabin crew are medically fit when on duty.

“In our view, in circumstances when disclosure of personal data is properly rendered mandatory, it is necessary to advise the data subject of the adverse consequence of failing to disclose, that advice does not thereby constitute a threat or the exertion of undue influence.

“In this regard, it is to be remembered that Cathay’s disciplinary procedures are not only for the protection of Cathay’s interests but ensure also that a member of the cabin crew staff is not in any way prejudiced in his or her employment without a full and fair investigation.”

In a press conference arranged soon after the judgment was handed down, Woo said he had received legal advice to appeal against the ruling.

However, the commissioner said he needs to consider various factors before he decides whether to appeal, including the strength of the legal ground to appeal, whether it is in the public interest and a proper use of public money and also the resources of the commission.

Cathay Pacific welcomed the ruling, saying it has confirmed the need for the airline to seek medical information.

Cathay Pacific Airways Flight Attendants’ Union chairwoman Becky Kwan Siu-wah said she found the judgment “shocking” and she will ask the privacy commissioner to take the case to a higher court.

The change reflects recent negotiations between the Cathay Pacific Airways Flight Attendants’ Union and the airline’s management. The rule change will affect the 5,000 cabin crew currently based in Hong Kong, and also will be applied to the 1,500 or so new-hires that Cathay Pacific intends to add to its work force by the end of this year.