Cathay Pacific Airways is to cut 90 per cent of its services to mainland China for two months as it combats the fallout from the deadly coronavirus outbreak. Hong Kong’s battered flagship airline will reduce overall flight capacity by about 30 per cent, its chief executive Augustus Tang Kin-wing said on Tuesday. The carrier, one of Asia’s premium airlines and one of the biggest corporate victims of several months of anti-government protests in Hong Kong, has seen passenger numbers collapse by 50 per cent in recent days, sources said, citing comments from a briefing on Monday led by Mark Hoey, the airline’s general manager of operations. The contagion, which started in Wuhan, capital of mainland China’s Hubei province, has played havoc with air travel, with travellers cancelling trips to affected destinations and border restrictions around the world on people who have recently visited mainland China. It has infected more than 20,000 people in mainland China, and killed more than 400. On Tuesday it claimed its first victim in Hong Kong . Tang said in a company memo that the outbreak’s impact on its business had been “very significant”. “We have already been taking measures to preserve our cash,” he said. “Today however, we will be announcing further significant short-term reductions to our capacity, due to the drop in customer demand into and around the region and more widely across the markets to where we fly.” Calling on employees to “pull together as one”, he said the cuts were “temporary for now and driven by the commercial and operational realities at the current time, as well as the projections in short-term demand”. In a statement to the Hong Kong stock exchange, the company struck an optimistic note. “Cathay Pacific’s current financial position remains strong and will enable it, despite the current difficult trading conditions, to maintain the quality of its products and services”, the statement read. ‘It’s chaos’: Hong Kong’s domestic workers call for help amid virus outbreak The mainland network reduction could head off a vote planned for Saturday by cabin crew at Cathay Pacific’s sister airline Cathay Dragon, on a potential strike over the groups’s prior refusal to stop all flights to or from the mainland. The airline’s union said, however, that it would not call off the vote, saying it was still for members to decide. Bookings for mainland services had already been frozen while the schedule is overhauled. Flights to Shanghai Pudong, typically flown about 13 times a day, could fall temporarily to as few as two or three daily flights. Approximately seven daily flights have already been cancelled. Services to Guangzhou, Xiamen, Hangzhou and more have been temporarily suspended. “The airline’s commercial, revenue and airline planning teams will decide which routes to scale back flights on by the end of the week,” a source familiar with the situation said, before Tang’s announcement. Flight cuts would depend on individual airports and “use it or lose it” runway slot rules, sources said, citing London Heathrow requiring airlines to use at least 80 per cent of slots during the schedule period, which lasts six months. In some instances, the airline would look to keep a minimum amount of services to comply with foreign airports’ runway slot rules. Cathay has been roiled by the sudden entry restrictions on anyone who had visited mainland China within 14 days, such as the United States, Singapore, Australia and New Zealand among more than a dozen countries. The Philippines also barred anyone visiting via Hong Kong last Sunday. Italy has barred flights from mainland China, Hong Kong, Taiwan and Macau until April 28. All this has left the airline’s customers unable or unwilling to travel. The carrier has also encouraged people flying into, out of or through Hong Kong to defer or delay trips free of charge. Staff, meanwhile, remained in the dark over whether the airline would introduce mandatory unpaid leave to cope with the downturn. The company said it would resist grounding planes, which would cost more money than if the downturn lasted just a couple of months. Bosses planned to put aircraft through early heavy maintenance inspections, which typically last six to eight weeks, while also reducing the number of hours they fly. If an airline has a heavy presence in China, they are going to be parking a lot of very expensive aeroplanes. It is definitely going to cut into their financial performance Henry Harteveldt, principal at Atmosphere Research However, Hoey indicated many more planes would be retired in the near future than the 10 planned. Several Boeing 777-300ERs had their lease due, he said, so the airline had planned to return those to the aircraft lessors. Only one Boeing 777 had been officially due to be retired and the company denied, before the viral outbreak, that the number would be increased. Cathay has six Boeing 777s with leases expiring in 2021, according to its 2018 annual report, but none in 2020. During the SARS crisis of 2003, Cathay reduced its passenger schedule by 45 per cent and parked 22 aircraft. Henry Harteveldt, principal at Atmosphere Research, a US-based travel analysis firm, said the reductions would mean a financial hit for the carrier. “If an airline has a heavy presence in China, they are going to be parking a lot of very expensive aeroplanes,” he said. “It is definitely going to cut into their financial performance.” He said it was a “really trying time” for Cathay Pacific, noting its current problems were not of its own making. The challenges come during an already turbulent period for the company, which took major flak during anti-government protests which have gripped Hong Kong since June. That included a boycott by mainland Chinese travellers, problems with the mainland aviation regulator and staff departures. The company first told employees in November that it planned to cut capacity by 1.4 per cent in 2020, resulting in fewer flying duties for about 13,000 cabin crew and 4,000 pilots. “It seems that the damages continue to widen for Cathay,” Ivan Su, equities analyst at financial services firm Morningstar, said. “In absolute terms, the revenue loss will probably be higher than those booked during Sars, primarily because Cathay’s business has more than tripled in size.”