Hong Kong’s flagship airline Cathay Pacific warns of significant drop in year-on-year performance in the first half of 2020 amid poor travel demand caused by coronavirus outbreak
- Airline further reduces its capacity for February and March from 30 to 40 per cent, in a move analysts indicate the travel situation is worsening
- Ronald Lam, chief customer and commercial officer, describes Lunar New Year holiday last month as the most challenging phase the airline has experienced ever
Hong Kong’s flagship airline Cathay Pacific has warned its year-on-year financial performance in the first half of 2020 will be “significantly down”, while adding it was likely to extend flight reductions into April amid the deadly coronavirus outbreak. The airline on Monday said it was widening its capacity reductions for February and March, shrinking by 40 per cent instead of 30 per cent, in a move analysts indicated the travel situation was worsening.
In a statement, Ronald Lam Siu-por, the airline’s chief customer and commercial officer, described the Lunar New Year holiday last month was the most challenging the company has experienced ever.
“Travel demand dropped substantially as the novel coronavirus outbreak in mainland China intensified towards the end of the holiday period,” he said.
The airline also blamed travel restrictions from governments worldwide on visiting mainland China, and in some cases even Hong Kong, for the poor travel demand.
“The first half of 2020 was already expected to be extremely challenging financially,” Lam added.
“But the poor travel demand and the consequent capacity reduction will significantly affect the company’s financial performance over the same period last year.”
Last year, the airline made a net profit of HK$1.32 billion in the first six months.
The airline earlier asked all its 27,000 staff to take unpaid leave to help it preserve its cash.