Embattled Hong Kong airline Cathay Pacific carried just 13,729 passengers in the whole of April – an average of 458 passengers per day. The figures were revealed as the Cathay Pacific Group announced an unaudited loss of HK$4.5 billion for the first four months of 2020 brought on by the COVID-19 pandemic that is decimating the aviation industry.
The airline’s chief operating officer Ronald Lam described the financial outlook as “very bleak” for at least the next few months ahead. Cathay Pacific has slashed capacity by 97 per cent, grounded the vast majority of its fleet and is working on plans for substantial “structural change” that could include mass layoffs.
Passenger numbers, recorded in revenue passenger kilometres (RPK’s), fell by 99.3 per cent in April compared to the same month in 2019. The airline noted that the wider slump in passenger demand prompted by the pandemic had been exacerbated by a ban on transit passengers passing through Hong Kong.
Cathay Pacific will continue to only offer a “bare skeleton” operation, serving just 14 destinations. Lam cautioned that the airline’s recovery may be hit still further by the fact that it operates only international services.
“Industry bodies and analysts are now predicting a much more prolonged recovery for the global aviation industry, with international travel expected to pick up more slowly than domestic travel as border restrictions are only gradually eased,” he explained.
“It is widely expected that international travel demand will only return to pre COVID-19 levels in a few years. As Hong Kong’s home carriers, we do not have the benefit of a domestic passenger network as a buffer.”
In June, Cathay Pacific sees “no immediate signs of improvement” and is looking to increase capacity by just 2 per cent. That plan, however cautious, remains subject to a “potential relaxation in government health measures.”
With Lam warning that there won’t be a “meaningful recovery for an extended period,” the Cathay Pacific Group is now pursuing significant structural changes. In an internal memo first sighted by SCMP, the airline told pilots that it was modelling “varying degrees of structural change that may be required to preserve our business and our collective future from the catastrophic impact of Covid-19.”
While the airline said “no firm direction has yet been set” it also cautioned that the airline was “not taking anything off the table and we can’t rule out anything to ensure our airline business will come out from the crisis stronger and more competitive.”
Cathay Pacific has already announced plans to make 300 international cabin crew based in the United States redundant and most Hong Kong-based employees have signed up to take three weeks of unpaid leave. That scheme is set to finish in June, at which point lay-offs may be required.
