Cathay sees passenger numbers drop 60pc
Saturday, April 12, 2003
hongkong.scmp.com
JOSEPH LO and ANNETTE CHIU
Cathay is carrying just one-third the number of passengers it did this time last year, with fears over the spread of Sars and conflict in Iraq prompting a collapse in air travel.
A free-fall in passengers using Chek Lap Kok has prompted Cathay to issue an unprecedented warning that its profits for the first half of the year will be severely affected and that no end to the crisis is in sight.
To help contain the economic fallout, Cathay yesterday said it would cut nearly 40 per cent of its flights for an unspecified period.
The airline carried an average of one million passengers a month in March and April last year. A senior management source said the average passenger load factor now was in the "low 30 per cent range".
Mainland airlines also have slowly begun to acknowledge the impact of a drop in demand around the country.
Cathay's profit warning came just days after chief executive David Turnbull told staff through an in-house newsletter that the airline was facing its gravest crisis in 26 years and that passenger bookings had been "annihilated".
Mr Turnbull said: "Cathay Pacific is being badly affected by the fall in passenger demand and we must therefore take action to conserve cash and minimise spending.
"With lingering uncertainty in the Middle East and the profound impact that the fear of atypical pneumonia has had globally, we do not know how long the current weakness in travel demand will continue.
"It is therefore not possible, at this stage, to quantify the potential impact on the company."
While regional routes bore the brunt of Cathay's previous reductions, an increasing number of flights to North America and Europe will now be affected as well.
Another Cathay executive said the service cuts would have been much worse if not for a stable air cargo business.
The Airport Authority said there were 183 cancelled flights yesterday, about one-third of scheduled services.
Meanwhile, national carrier Air China's Hong Kong deputy general manager, Qiao Junrong, said Sars fears had affected its routes to and via Hong Kong.
"The outbreak definitely has an impact on the airline but I can't provide you with the figures. We cut capacity, as many airlines did. All routes via Hong Kong are affected," he said.
A spokesman for China Eastern Airlines, which derives about half its revenue from international and Hong Kong routes, said it expected business on its Hong Kong route to fall to 40 per cent of capacity. |
