MIAMI- Cathay Pacific (CX) announced new financial actions, delaying aircraft orders and cutting capacity, to diminish the financial impact of the coronavirus.
The airline group registered a drop from 90,000 passengers to 16,000 for Cathay Pacific and Cathay Dragon in the current period. As a result of the COVIF-19 fallout, the carrier lowered its passenger capacity by 82% in February.
“We have no idea when a recovery will take place and we don’t know exactly what it would look like. All we know is we remain in a very dynamic situation,” said Cathay Pacific Chairman, Patrick Healy.
New delivery delays and capacity cuts
The Hong Kong-based carrier revealed that is in conversations with Airbus and Boeing to delay the delivery of new aircraft orders.
While actions to postpone Airbus deliveries become effective, the airline did confirm that it would receive 17 A350s and A320s from Airbus this year with seven A350s going to Cathay, six A321neos to Cathay Dragon (KA), and four A320neos to HK Express.
“We are not yet at a point in time concluding those discussions. We don’t yet have formal redelivery dates for when those aircraft will be delivered to us,” added Chief Operations and Services Delivery Officer, Greg Hughes.
Days ago, CX grounded 120 planes, half of its fleet. By now, it forecasts a 65% fall of its capacity in March and April, which represents a 40% above measure from that previously expected due to an “unprecedented” challenge, according to Hughes.
“We have a base forecast we’re working which anticipates continued cuts through the first half of the year,” Hughes added.
Other operations postponed
In December 2019, the airline announced a new terminal in Hong Kong International Airport (HKG), which also serves as CX’s hub. Together with the Airport Authority of Hong Kong (AAHK), the project was planned to be operative on April 1, 2020.
As a result of the current crisis, the carrier is speaking with AAHK for relief measures, which Healy added must be “commensurate with the scale of the challenge we currently face”. To date, there are no new announcements about the terminal’s launch.
However, AAHK unveiled an HK$1.6bn relief package to help the industry through the crisis, including rental concessions and the waiver of fees.
CX’s number concerns
Following the announcements, CX released its 2019 annual results showing total revenue of about HK$106,973m, which represents a 3.7% drop in comparison to the last year.
Due to the recent events, the Hong Kong-based airline will also consider job cuts as a cost-saving measure. Previously, it offered an unpaid leave of three weeks to its employees.