Cathay Pacific planning capacity cuts

It had to happen at some stage. In Hong Kong the current protests have led to a fall in visitors both for business and leisure.

This morning, Reuters reports that Hong Kong-based Cathay Pacific and Cathay Dragon suffered an 11.3 per cent fall in passenger numbers in August.

Reuters quotes Cathay Pacific executive Ronald Lam as saying, “Given the current significant decline in forward bookings for the remainder of the year, we will make some short-term tactical measures such as capacity realignment.”

As sure as night follows day, other airlines will be planning capacity cuts which have yet to be announced.

Indeed Australia’s Qantas was the first international airline to announce a capacity cut. Last month the airline said it would be operating some flights with smaller aircraft.

What is significant from the Cathay Pacific news is that it claims “demand for premium class travel had fallen more significantly than for leisure travel.”

This is worrying for any airline because, as aviation consultant John Strickland told Business Traveller, a decline in premium traffic “is the biggest hit to profit.”

Reuters also reports Cathay Pacific as saying that demand from mainland China and Northeast Asia had been “severely hit, although Australia and New Zealand were more positive.”

However the latter news concerns Cathay Pacific. Qantas says the opposite.

Its CEO Alan Joyce claims its travel to Hong Kong had declined 10 per cent.

No details are yet available as to which routes will see capacity cuts.

But because very long-haul routes are the costliest to operate we could expect to see reductions on Cathay Pacific services to areas such as Europe and North America.

Readers who hold bookings in the months ahead would be advised to check their reservations in case of schedule changes.

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