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Cathay Pacific Braces For Tough Times

Posted in Airline News, Cathay PacificNo comments

Cathay Pacific Airways is bracing for tough times ahead and on Tuesday announced new measures to cope with a serious downturn in business as a result of the global financial crisis.

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.

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