Cathay Pacific (CX, Hong Kong International) is planning to cut passenger flight capacity by 1.4% next year, reversing earlier projections that had called for a boost of 3.1%, Reuters has reported citing an internal staff memo.
"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," Chief Executive Augustus Tang wrote to employees.
The airline is suffering from a massive drop in demand caused by the ongoing pro-democracy protests in Hong Kong, which have at times turned into violent confrontations between protesters and riot police.
Traffic from mainland China, Hong Kong's key market, has plummeted and forward bookings for 2020 remain significantly below earlier projections. In October, Hong Kong International posted a 13% drop in passenger traffic.
In mid-November, Cathay Pacific announced cuts to its fleet growth plan for 2020. It now plans to add just seven aircraft, down by six from the original plan.
The South China Morning Post has since reported that in addition to the previously announced freeze in new hires, Cathay Pacific has replaced year-end bonuses for its staff with one-off, lower payments equivalent to one monthly salary. The airline will also offer raises of just 2% in 2020, down from the range of 3-8% originally forecasted and below Hong Kong's inflation rate of 3.1%.
