Cathay Pacific to make further cuts to flights -internal memo

Credit: REUTERS/BOBBY YIP

Will offer two flights a week to just four destinations

Cargo revenues tracking below last year due to passenger cuts

CEO and chairman to take 30% cut to base salary

Adds details on cargo, unpaid leave, salary cuts

SYDNEY, April 3 (Reuters) - Hong Kong's Cathay Pacific Airways Ltd 0293.HK will make further cuts to passenger capacity because of extremely low demand, leaving it with just two flights a week each to four destinations in April, according to an internal memo.

The airline carried only 582 passengers one day this week with a load factor of 18.3%, which compares to 100,000 customers on a normal day, Cathay chief executive Augustus Tang said in a memo to staff seen by Reuters.

The carrier will maintain a skeleton network with two weekly passenger flights from Hong Kong to London, Los Angeles, Vancouver and Sydney and will also try to capitalise on stronger cargo demand, he said.

"However, the reduction of capacity on our wide body fleet means our cargo revenues are still well below last year," Tang said.

Most Cathay employees already agreed to take three weeks of unpaid leave as part of an effort to cut costs.

Tang said further unpaid leave in the form of temporary stand-downs and furloughs were occurring in some regions for ground employees where it had stopped flights or reduced capacity.

He will take a 30% cut to his base salary from April to December, as will Chairman Patrick Healy, with executive directors taking a 25% cut, the memo said.

(Reporting by Jamie Freed; Editing by Tom Hogue and Gerry Doyle)

((Jamie.Freed@thomsonreuters.com; +61 2 9321 8174;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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