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CX to cut capacity on some long-haul routes
Fri 11 May 2012
Fri 11 May 2012
The airline made the announcement when issuing a trading statement to the Hong Kong Stock Exchange advising that its financial results for the first half of the year were “expected to be disappointing”.
The airline has announced a raft of measures to reduce costs that will include adjusting both passenger and cargo capacity, deploying more fuel-efficient aircraft on long-haul flights, speeding up the retirement of its older Boeing 747-400 aircraft, and putting a hiring freeze on new or replacement ground staff. At the same time it is offering voluntary unpaid leave for cabin crew from June and introducing cost-saving measures such as cancelling non-essential business travel for staff and reducing its marketing and IT spend.
On the passenger side, the Cathay Pacific Group as a whole will see its capacity growth reduced to 3.2% from the targeted 7% this year. The capacity growth for Cathay Pacific will be reduced to 2% from the targeted 7%. The airline’s network will remain intact, but frequencies on some long-haul routes to North America and Europe will be reduced in response to high fuel costs and depressed yields. The airline has already made some ad hoc cancellations in May, primarily to Taipei, Shanghai and Japan – and these will continue in June.
The Group will retain its focus on expanding capacity within the region, with Dragonair’s capacity set to grow by 9.2% against a target of 7.3% as a result of the launch of new destinations and increased frequencies on regional and mainland routes.
In terms of fleet deployment, the airline will put its newer, fuel-efficient Boeing 777-300ERs on more routes, including flights to San Francisco and Paris. There are no plans to cancel or defer aircraft orders and Cathay Pacific is still on track to take delivery of 15 new planes this year, with six already in operation.