Cathay Pacific Further Cuts Hong Kong Capacity Due To Unrest

Cathay Pacific will be cutting down its passenger flight capacity by 1.4% next year rather than its original plan to increase it by 3.1%. Revealed on Friday, the information was obtained by Reuters through an internal memo. The decrease is a result of a change in outlook – solely due to anti-government protests that have consumed the city in recent months.

Cathay A350
Anti-government protests have been happening in Hong Kong since June. Photo: Cathay Pacific

This capacity reduction comes after Cathay Pacific‘s reduction of its second-half profit guidance earlier this month. The anti-government protests started in June and have steadily continued ever since. Tourism and business have been hampered by these protests as numerous airlines also reduce their flight capacity to the East Asian financial hub.

In the Reuters-obtained memo, this is what CEO Augustus Tang had to say:

Advertisement

“Given the immediate commercial challenges and the fact that our position has deteriorated in recent weeks, we must take swift action to adjust our budget operating plan for 2020 downwards again. Put another way, rather than growing our airlines in 2020, for the first time in a long time, our airlines will reduce in size.”

Advertisement

The memo also adds that revenue performance continues to be disappointing. Furthermore, advance bookings through to 2020 remain much lower than expected. Weak traffic from mainland China has particularly affected the airline’s revenue.

Other airlines suffering

The protests have not just affected Cathay Pacific. In fact, Hong Kong Airlines recently announced the closure of its last long haul service: Hong Kong to Vancouver. The flight will no longer operate after February 2020 while bookings will be closed from early December.

Advertisement

Prior to this, the airline had also removed a number of long haul routes from its schedule. San Francisco was discontinued in October, and the Auckland route was closed earlier in the year. It also announced it would be suspending Los Angeles, its last US route, from February 6th, 2020.

Hong Kong Airlines
Shorter routes have been slashed by Hong Kong Airlines as well. Photo: Hong Kong Airlines

As for mainland Chinese carriers, cuts have been made virtually across the board. Shanghai Airlines, operating flights from Shanghai Hongqiao, is using much smaller aircraft on its flights to Hong Kong. China Eastern’s flights from Shanghai Pu Dong operated by its A330/350 and 777-300ER fleet have also been replaced by much smaller Airbus A319/320/321 aircraft.

Other airlines, such as Xiamen Airlines, have suspended some routes altogether. This includes flights to Hong Kong from Fuzhou, Hangzhou, Quanzhou, and Xiamen. China Southern is canceling its services from Shenyang and Yiwu. Many of these suspensions have been filed through to the end of this year – December 31st – with some going even longer.

Conclusion

Many interviews with protestors indicate that there is no end in sight for these protests. There is zero indication and no expectation that the Chinese government will make any concessions or even negotiate with the protestors. This unrest could continue far into the future.

Do you think Cathay Pacific can weather this storm? What do you think it will have to do to survive this unrest? Let us know by leaving a comment.

We contacted Cathay Pacific for a request for comment. However, no response was received at the time of publishing this article.

Cathay Pacific Boeing 777
There is little or no end in sight for these protests. Photo: Cathay Pacific.
Advertisement

4
Leave a Reply

2 Comment threads
2 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
4 Comment authors
newest oldest most voted
Mark Thompson

Could the Chinese government shut down Cathay Pacific Airlines?

Steve To

No, they wouldn’t be that stupid to do so as they have shares in the company through 3rd parties. Why let other airlines benefits from such a move. If they really want to make it difficult, all they need to ramp up the air space control to reduce accessibility of the Chinese air space. I have personally experienced delays caused by air space restrictions. Yes, they can also restrict the number of people going to Hong Kong through immigration control as happened when South Korea allowed US to put missiles on its soil. In short, there are more ways to… Read more »

ALLAN

What is happening now is no different than 24 years ago. Then we flew Singapore Airlines
and landed on Taiwan at a time China was flexing it’s muscle then. As we were landing, the Gun emplacements around the airport were definitely nerving. We eventual were able to continue
on to our ultimate destination- Bali. We are planning another trip to Bali next March, this time
on Cathay Pacific. Seriously hoping all disruptions will have ceased.