Wirraway
12th Apr 2003, 22:03
Saturday April 12, 11:46 PM AEST
Cathay May Halt Passenger Flights in May
By Rico Ngai
HONG KONG (Reuters) - Hong Kong's Cathay Pacific Airways is considering stopping all passenger flights in May due to a sharp fall in the number of travelers amid fears over SARS, the pneumonia-like epidemic that is sweeping through the former British colony.
"We forecast that the number of passengers could fall to less than 6,000 per day in May in which case we will have to consider grounding the entire passenger fleet," a Cathay Pacific's internal Internet posting sighted by Reuters said.
Cathay is currently carrying less than 10,000 passengers per day compared to the usual passenger levels of more than 30,000, the memo said.
The firm's executives were not immediately available to comment.
"We are literally hemorrhaging cash -- approximately US$3 million per day. The current strategy is simply to stem the bleeding and buy time," Nick Rhodes, Cathay Director of Flight Operations said in the grave memo.
Rhodes was citing a briefing given by the airline's chief executive officer David Turnbull on Friday.
Rhodes said the airline currently has canceled about 42 percent of its flights and the remaining flights are operating at a load factor of 30-35 percent. Load factor indicates the number of paying customers as a proportion of seats available.
Hong Kong's Airport Authority said on Saturday about 33 percent of the total number of scheduled flights for April has been canceled.
Cathay, Asia's fourth largest airline with a turnover of more than HK$33 billion (US$4.23 billion) in 2002, issued its first-ever profit warning on Friday citing adverse impacts by the Severe Acute Respiratory Syndrome (SARS) virus and the war on Iraq.
The warning hammered Cathay's shares to their 16-month low, closing at HK$8.95 on Friday. They had lost nearly a quarter of their value in the last three weeks when SARS first reared its head in Hong Kong in March.
Uncertainties ahead of the airline increased when the World Health Organization issued an advisory on April 2 urging travelers to postpone visits to Hong Kong in light of the city's failure to contain the spread of the pneumonia-like disease.
Cathay has already stopped all "non-essential" expenditure and it is offering voluntary unpaid leave.
"If there is not a miracle cure for SARS soon and a sudden withdrawal of the WHO advisory against travel to Hong Kong, the cuts are going to have to be deeper," the memo said.
The measures include involuntary unpaid leave and job sharing, it said.
"Whatever scheme is agreed, the company is determined that every employee will share the pain equally. We are all in this together," it said.
"Even if all employees worked for nothing at present, we would still be losing nearly US$2 million per day. Any savings will only buy time," it added.
Cathay May Halt Passenger Flights in May
By Rico Ngai
HONG KONG (Reuters) - Hong Kong's Cathay Pacific Airways is considering stopping all passenger flights in May due to a sharp fall in the number of travelers amid fears over SARS, the pneumonia-like epidemic that is sweeping through the former British colony.
"We forecast that the number of passengers could fall to less than 6,000 per day in May in which case we will have to consider grounding the entire passenger fleet," a Cathay Pacific's internal Internet posting sighted by Reuters said.
Cathay is currently carrying less than 10,000 passengers per day compared to the usual passenger levels of more than 30,000, the memo said.
The firm's executives were not immediately available to comment.
"We are literally hemorrhaging cash -- approximately US$3 million per day. The current strategy is simply to stem the bleeding and buy time," Nick Rhodes, Cathay Director of Flight Operations said in the grave memo.
Rhodes was citing a briefing given by the airline's chief executive officer David Turnbull on Friday.
Rhodes said the airline currently has canceled about 42 percent of its flights and the remaining flights are operating at a load factor of 30-35 percent. Load factor indicates the number of paying customers as a proportion of seats available.
Hong Kong's Airport Authority said on Saturday about 33 percent of the total number of scheduled flights for April has been canceled.
Cathay, Asia's fourth largest airline with a turnover of more than HK$33 billion (US$4.23 billion) in 2002, issued its first-ever profit warning on Friday citing adverse impacts by the Severe Acute Respiratory Syndrome (SARS) virus and the war on Iraq.
The warning hammered Cathay's shares to their 16-month low, closing at HK$8.95 on Friday. They had lost nearly a quarter of their value in the last three weeks when SARS first reared its head in Hong Kong in March.
Uncertainties ahead of the airline increased when the World Health Organization issued an advisory on April 2 urging travelers to postpone visits to Hong Kong in light of the city's failure to contain the spread of the pneumonia-like disease.
Cathay has already stopped all "non-essential" expenditure and it is offering voluntary unpaid leave.
"If there is not a miracle cure for SARS soon and a sudden withdrawal of the WHO advisory against travel to Hong Kong, the cuts are going to have to be deeper," the memo said.
The measures include involuntary unpaid leave and job sharing, it said.
"Whatever scheme is agreed, the company is determined that every employee will share the pain equally. We are all in this together," it said.
"Even if all employees worked for nothing at present, we would still be losing nearly US$2 million per day. Any savings will only buy time," it added.