News
Cathay boss orders cost reduction drive amid weakening outlook
May 20th 2016
Following weak April traffic figures, Cathay Pacific Airways chief executive, Ivan Chu, has told staff it “is now necessary for us to contain costs further”, particularly with the carrier’s yields "coming under ever-more pressure". Read More »
Passenger traffic at Cathay and Cathay Dragon dropped 0.1% in April compared with the year-ago period. Their combined load factor declined 2.3%, to 84.9%. As predicted during the full-year results presentation in March, premium loads and yields continued their downward momentum in April while economy class demand remained solid.
Chu has instructed all departments to curb spending by stopping all non-essential discretionary expenditure, freezing hiring, not replacing non-operationally critical staff and reviewing operational budgets.
Cathay is not considering lay-offs at the moment and said it will go ahead with its expansion and rejuvenation drive, which included a complete makeover of its global lounges, Dragonair’s $100 million rebranding to Cathay Dragon, the delivery of its first of 48 on-order A350s on May 27 (leased from AerCap) and the launch of a four-weekly B777-300ER route to Madrid.
Cathay is scheduled to receive 12 A350-900s this year, ten more in 2017 and 26 of the larger and longer-range A350-1000s from 2018 to 2020. The Hong Kong carrier is planning the first A350 revenue service on June 1, on CX907 to Manila.
In separate news, Cathay Cargo and Lufthansa Cargo have entered a joint business agreement whereby both operators will cooperate on network planning, sales, IT and ground handling.
"Our joint network will cover more than 140 direct flights per week between Hong Kong and 13 European destinations", said Simon Large, Cathay’s director cargo. "As a result of our joining forces, customers will gain access to unique flexibility with more flights to choose from and a combination of feeder and direct flights. In this way their cargo can reach its destination hours earlier," explained Peter Gerber, CEO and chairman of the Executive Board of Lufthansa Cargo.
