Cathay Pacific, and its wholly owned subsidiary Hong Kong Dragon Airlines, will be "progressively" reducing its flights into mainland China by 90% as a result of the significant drop in demand for flights as a result of the Wuhan coronavirus, the carrier said in a statement yesterday.
The airline had earlier reduced flights into China by 50% and this further reduction will be accompanied by major contraction around the rest of its network over the next two months depending on market demand and unspecified "other factors", which it said would impact flight frequencies. .
The carrier said that it expects the total impact across the Cathay Pacific and Cathay Dragon network will be a reduction of about 30% in capacity. It said these reductions were intended to be temporary and are linked to projections for short-term demand.
Despite scything its network capacity, the firm said its current financial position, "remains strong and will enable it, despite the current difficult trading conditions, to maintain the quality of its products and services" , and it warned shareholders and potential investors to exercise caution in dealing in the shares of the Hong Kong carrier.
Despite this, chief executive Augustus Tang, asked the firm's 27,000 employees to take three weeks of unpaid leave, in a video message to staff in which he described the situation as being as grave as the 2009 financial crisis, which saw demand for flights to one of Asia's two main financial centres plunge.
The coronavirus piles additional pressure onto Cathay, which issued a profit warning last year as a result of falling demand for flights to Hong Kong due to the ongoing political protests.