Following a disastrous December where passenger numbers were down by 98.7% compared to the year before, Cathay Pacific is looking at further capacity cuts due to new restrictions for airline crew. The airline is considering requesting volunteers for flights that will require them to quarantine on return but says it may need to scrap one-third of its current passenger services.
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Preliminary assessment is 60%
As we reported last week, Hong Kong's government plans to impose a 14-day hotel quarantine rule for returning long-haul airline crew. This will apply to any crew member that has had a layover overseas. Moreover, crew will then be subject to seven days of "medical surveillance."
The special administrative region's flag carrier Cathay Pacific, already suffering unprecedented losses due to the crisis, says the new regulations mean it will have to scrap up to two-thirds of passenger flights. Furthermore, it will need to reduce cargo operations by 25%. However, the exact consequences of the new rules remain unclear.
"The actual extent of such impact is yet to be confirmed and will be affected by a number of factors, including the success of mitigation measures we are able to adopt, such as agile manpower resources management. At this stage, our preliminary assessment is that the new measure may result in a reduction of current passenger capacity of around 60%", Ronald Lam, Cathay Pacific Group's Chief Customer and Commercial Officer, said in a statement seen by Simple Flying.
Looking for volunteers to keep operations going
According to an internal memo to staff acquired by Reuters, the airline is planning to ask for volunteers that could fly for three weeks, followed by two weeks of quarantine and another two weeks off-duty. Cathay underscored it would be a temporary measure, and not all flights would require such a regime.
Mr Lam added in his statement that the airline's monthly cash-burn would increase substantially by about HK$300 million ($38.7 million) to HK$400 million ($58.6 million) per month. This is in addition to the HK$1 billion ($129 million) to HK$1.5 billion ($193,5 million) the airline is already going through every four weeks.
Cathay Pacific is already one of the hardest-hit carriers in the industry due to the crisis - and that is no mean feat. In December, which saw a ban on flights from the UK, the airline carried just 39,989 passengers. Those numbers signify a reduction of 98.7% compared to the same month the year before. Cargo carriage dropped by 32.3%.
Government "reviewing and refining"
The Hong Kong government has previously provided aid to Cathay in the sum of HK$39 billion (US$5 billion). Furthermore, early on during the crisis, it advance-purchased half a million tickets to support the airline. However, at the moment, it does not seem to be immediately sympathetic to its flagship airline's woes. A spokesperson told Reuters that,
“In the light of the evolving pandemic situation locally and internationally, the Government will keep reviewing and refining the arrangements applicable to different categories of exempted persons, including air crew, with reference to all relevant considerations."
Currently, aircrew is tested upon arrival in Hong Kong and must wait for 24 hours in a hotel room before receiving the results. All incoming travelers must quarantine for 21 days.
Simple Flying has reached out to Cathay Pacific for further details on the cuts but was yet to receive a response before publication.
What do you make of Hong Kong's new crew quarantine? Can Cathay survive prolonged restrictions from the government? Let us know in the comments.