In an internal memo seen by Reuters news agency, Cathay Pacific is in the process of instigating cost-cutting measures to counteract the slump in demand from mainland China as well as the general lack of passenger numbers wishing to travel to the former British colony as a consequence of the civil unrest Hong Kong is currently experiencing.
The flag-carrying airline has been hit harder than most major corporations operating in Hong Kong; passenger numbers for this August were 11.3 percent lower than for August 2018. According to the memo issued by the new Chief Executive, Augustus Tang, executives should examine all spending with a focus on cost cutting. In addition, Tang made it clear that there would be no additional hiring of staff to replace departing employees in non-flying positions unless approval is given by the spending control committee.
Cathay Pacific had only just returned to profitability for the January-June period since 2016 after the successful implementation of a three-year turnaround plan and had predicted that the second half of the year should be even better owing to seasonality. Jefferies analyst Andrew Lee has predicted the airline could swing to a US$124.1 million loss for the second half of the year. The carrier has also suffered from a reasonable degree of internal turmoil at the top after former CEO Rupert Hogg unexpectedly quit last month, while Chairman John Slosar resigned last week.Email Post to a Friend