Cathay Pacific Announces They May Cut Flights | Business Travel ...

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Cathay Pacific Airways Ltd. announced that there may be a need to park planes and decrease flights due to less insistence and high cost of fuel.? If the situation persists, the airline warns, they will consider this as an option.

Cathay Pacific, a Hong Kong based carrier, warned that 2012 would be a challenge.? They now state that over the past month they have experienced an even greater decline in business in economy class, and business and first class cabin passenger flights, which bring the airline their greatest profit, have weakened as well.?

The airline states that growth of revenue in the past few weeks is not as projected and falls short in keeping steep with capacity growth.?? It added that with the recent decline, it is not a sustainable situation.

In a newsletter to employees published April 20^th Cathay Pacific Chief Executive, John Slosar, states that cargo business shows no indication of sustained increase and fuel prices remain at crippling highs.? The euro zone?s recent turmoil reinforces that the world is on a fine line.?

Slosar goes on to say that although the current situation is not as challenging as the global financial crisis in 2008 ? 2009 that Cathay Pacific will need to consider means to cut costs should the current situation persist, noting that additional means to cut back on spending will be necessary.

Cathay Pacific reports a 61% decline in net profit for 2011.? This was due to the soar in fuel costs and less demand for the Hong Kong based airline?s freight services, and for 2012 it projects continued decrease in demand. Fuel will remain a hard spot for Cathay Pacific which accounted for forty percent of operating costs in 2011 The cost of fuel in 2010 was HK $28.28 billion and in 2011 HK $38.9 million, a rise of 38%.??

During 2008 and 2009 during the global financial crisis, the airline cut flights, delayed capital spending, and initiated a no pay leave for some staff members to cope with a reduction in revenues.?

The airline announced in March 2011 that Nagoya, Osaka, and Tokyo will experience cuts in flight during the first two weeks of April due to a decline in demand.? In December, Cathay Pacific announced that it would defer the arrival of two new Boeing Co. aircraft and scale back plans to expand cargo flying in 2012 due to freight being cheaper

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