Cathay Pacific Cuts 30% Of Flights, Puts Employees On Unpaid Leave

Cathay Pacific Cuts 30% Of Flights, Puts Employees On Unpaid Leave

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Suffice to say that Cathay Pacific has had a rough several months. In early 2019 Cathay Pacific was once again profitable after a couple of years of losses, and things were looking good.

Unfortunately in the second half of last year things changed, as huge protests in Hong Kong had huge impacts on the airline, initially politically, and eventually in terms of demand. Now there’s the coronavirus, which has even further impacted demand for travel to and through Hong Kong.

Cathay Pacific had already been taking drastic measures prior to the coronavirus, but now they’re taking things a step further.

Cathay Pacific slashes 30% of route network

We’ve seen a lot of airlines cancel flights to & from both mainland China and Hong Kong, and Cathay Pacific is joining that club, as noted by Danny Lee at SCMP.

It was revealed yesterday that over the next couple of months, Cathay Pacific will be cutting over 90% of their flights to mainland China, and about 30% of their overall route network. Some sources suggest that passenger numbers at the airline have fallen by up to 50% in recent days, which doesn’t come as much of a surprise.

The airline will also be closing half of their lounges at Hong Kong Airport to cut costs.

As Cathay Pacific’s CEO August Tang said in a memo to employees:

“We have already been taking measures to preserve our cash. Today, however, we will be announcing further significant short-term reductions to our capacity, due to the drop in customer demand into and around the region and more widely across the markets to where we fly.”

For now, these changes seem to mostly cover flights in February and March, though I imagine the cancelations have the potential to be extended. For example, looking at routes to North America, @airlineroute notes that:

The cuts are in some cases even more drastic in other regions.

Cathay Pacific is cutting about 30% of their route network

Cathay Pacific asks employees to take unpaid leave

Since Cathay Pacific is suspending so many of their routes, they have more employees than they need at the moment. Cathay Pacific is asking all 27,000 of their employees (from managers to frontline employees) to take three weeks of unpaid leave between March 1 and June 30, 2020.

The last time Cathay Pacific implemented an unpaid leave scheme was in 2009, in response to the global financial crisis at the time. Cathay Pacific’s CEO says that the situation now is just as grave as then.

Here’s a video message from Cathay Pacific’s CEO to employees:

Bottom line

While mainland China is no doubt in the worst situation at the moment, Hong Kong is dealing with the coronavirus outbreak right after they’ve had huge issues with protests, so suffice to say the airline is in a challenging position.

Greatly cutting capacity over the coming months is a no brainer, and unfortunately, unpaid employee leave to go along with it makes sense.

It’s anyone’s guess how this coronavirus situation will unfold, so presumably, odds are good that these cancelations may be extended.

Given the latest information on the coronavirus situation, my thinking changed, and I ultimately canceled my flight through Beijing. For more on the rapidly-developing situation, check out these posts:

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  1. Keyser Soze New Member

    One reason to avoid Cathay Pacific, or if nothing else, block their in-seat cameras?

    https://www.surveillance.news/2019-08-18-cameras-installed-in-airline-seats-record-you.html

  2. W HO Guest

    It seems like CX has pulled the direct nonstop flight to EWR (CX 890) wef Feb. 10 until the end of Mar./Apr 1
    Alternatives offered are to connect in the west coast airports & transfer to a domestic flight (AA/UA narrow bodies)
    Umm - no thanks. I'll just wait for CX to contact me re: the changes.
    My booking's still showing as intact for the end of the month.

  3. coalharbour Guest

    Lucky, your headline "puts employees on unpaid leave" suggests it is mandatory. However your article switched to "asks employees to take unpaid leave" which means to me it is voluntary. So which one is it?

  4. Jon Guest

    @ TLS

    "Keep in mind that some countries require a two week quarantine if you’ve been to China. Hong Kong counts as China."

    Absolutely wrong assumption/advice. Two week quarantine applies to MAINLAND China. Taiwan, Macau and HK are all not considered mainland China.

  5. Cmorgan Gold

    I just got AS to rebook my outbound flight to CEB from CX to JAL. F class AS and J class JAL. Have to go to MNL instead of CEB as JAL does not fly to CEB. Will take PAL to CEB. I left the inbound alone for now going from CEB to ANC via HK Premium Economy. AS still telling me no avail in CX Business class cabin. Cost me an additional 45k miles....

    I just got AS to rebook my outbound flight to CEB from CX to JAL. F class AS and J class JAL. Have to go to MNL instead of CEB as JAL does not fly to CEB. Will take PAL to CEB. I left the inbound alone for now going from CEB to ANC via HK Premium Economy. AS still telling me no avail in CX Business class cabin. Cost me an additional 45k miles. Philippines will not allow entry for non citizens coming from mainland China or HK. That includes transiting via HK. Hopefully CX will not cancel my return.

  6. Phil Guest

    @Kevin do you have any idea how popular the route from HKG-TLV actually is? It’s very popular for Australians going to Israel because for many it’s the only option that does not involve backtracking from Europe and don’t forget the Arab carriers don’t fly to TLV (for obvious reasons) so Cathay is pretty much the only choice for Australians heading to Israel.

  7. Mileage Man Guest

    @Lucky - suggest making a post on list of award programs fee and cancellation waivers available or not for travel regions impacted due to the corona-virus. Might help with the blog readers having those travel itineraries.

    For instance - Asia Miles is not waiving any cancellations but only change fee.

  8. Ricahrd Guest

    Quite the interesting scenario. Booked award travel to / from Bali mid-March. One way via EVA and the other way via CX. Worst case cancellation fee if one is cancelled but the other isn't cancelled. Not the best time to be on the other side of the world but airline miles enough to book another return flight if required. Bali does have cheap accommodations so another week in Bali wont be the end of the...

    Quite the interesting scenario. Booked award travel to / from Bali mid-March. One way via EVA and the other way via CX. Worst case cancellation fee if one is cancelled but the other isn't cancelled. Not the best time to be on the other side of the world but airline miles enough to book another return flight if required. Bali does have cheap accommodations so another week in Bali wont be the end of the world. The return is via a CX ticket book via American Airlines so less risk. Best case the non-China airports will be free of the current issues in China. Ultimately for SE ASia Singapore will fare extremely well, new terminal and all. HKG and TPE are too close for comfort to China, virus or not.

  9. Casper Member

    It doesn’t change the fact that management is shit after Rupert was basically forced to resign...he really had a vision and means to turn the company around. Also, shout out to Gen Director Europe, James - he seemed to be the only one in EMEA to understand the company’s principles and he was the driving force behind many new routes opening to/from Europe.

  10. Casper Member

    @Kevin

    Having worked at CX for past 7 years (quit in Jan), so at a time when TLV, BRU, and MAN were launched I can confirm that MAN was one of the busiest routes, almost always going out full in Y and W, J cls wasn’t that popular but still good. As for MXP - a very, very lucrative business route, lots of pax in J, sometimes even F.

  11. TLS Member

    Keep in mind that some countries require a two week quarantine if you've been to China. Hong Kong counts as China.
    Just glad that my flight today was via Haneda instead of Hong Kong.

  12. jc Member

    @Lucky,

    Any idea on when these flights cancellations are going to be announced. I am scheduled to leave on February 8 from EWR-HKG and then onward to AKL with a return on February 20th. However, from looking at Expertflyer and what you have posted the February 20th HKG-EWR flight will be cancelled.

  13. Ross New Member

    I’m very worried about a business award ticket for a Europe trip I have in August, which involves transiting in HK and flying Cathay. There’s no alternate award availability to change to, at this point.

  14. Icarus Guest

    @kevin do you know the load factors and revenue .. or simply your opinion. Please provide some stats ?

    It’s unlikely flights would be cut otherwise

    Or do you believe only London merits daily + services

    There are around 7 million within the Manchester airport catchment area which also has some of the wealthiest pockets in the U.K. and it can certainly support those frequencies

    Likewise Milan which also supports Trans border traffic from Switzerland

  15. Kevin Guest

    @Icarus

    So what if MAN has the second largest student population in the UK? Those students are not flying back and forth between on a DAILY basis.

    I would understand if HKG-MAN was a seasonal flight operating during holiday periods when students are going back and forth, but there is no way that flight profitable when operated DAILY.

  16. Icarus Guest

    @kevin. No they are very busy. What makes you think otherwise? The Italian authorities forced them to suspend flights. Israel , UK and Italy have a large Filipino diaspora and they joke that Cathay is their home carrier MAN is the second largest conurbation in the U.K. largest student population plus science and research. You obviously believe most things only revolve around London or Paris

  17. Kevin Guest

    Not sure why CX didn't cut these routes earlier even without being affected by the protests and the coronavirus outbreak.

    Go to airlineroutes and see the full list of routes being cut. There is no way in the world there is that much demand between HKG and places like TLV, MIL, MAN, BRU, etc.

    Not wonder CX is losing money. Those routes much have like 50% load factors.

  18. Travis Guest

    I'm flying From Tel Aviv to HKG and on to SFO in April... if either of these legs get cancelled, will Cathay re-book me if I originally booked an award ticket on Alaska?

  19. Icarus Guest

    Very sad as Cathay are always good to me People should refrain from idiotic comments about award space and masks

    I’m also wondering whether the Olympics will go ahead as it may not be appropriate and many teams won’t be able to travel assuming this drags on

  20. John Guest

    @Julian, while I enjoy the airline industry information presented here and on other points blogs the main purpose of said blogs is to review and discuss using points to book awards. Save your preaching for the political site of your choice.

  21. Golfingboy Guest

    This measure is certainly needed however all executives, including Augustus Tang, should rotate amongst themselves taking three weeks unpaid leave. Leaders should never ask or expect employees to make sacrifices if they do not make the same, or more, sacrifices.

  22. Jon Guest

    @Creditian
    Oh, found Pooh!

  23. Mileage Man Guest

    Asia miles will not waive fees on cancellation or refund for flights arriving to, departing from or transiting through Hong Kong ;

    Seriously, WTF!!

  24. Creditian Guest

    Those political protesters have no guts to protest now, shame on them.
    They love to wear masks and proud of wearing it.
    Now it’s their moment, but they chicken out, what cowards!

  25. Ryan Costantin Member

    @John. The answer seems to be yes. F space for the end of next week on flight to N. America are pretty wide open.

  26. Julian Guest

    Terry & John, you two are idiots.

  27. John Guest

    The most important question, will they free up more award space?

  28. C Guest

    The unpaid leave is only voluntary at this stage!

  29. Terry Guest

    Tang can't even wear a tie? What happened to Swire's standards?

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Keyser Soze New Member

One reason to avoid Cathay Pacific, or if nothing else, block their in-seat cameras? https://www.surveillance.news/2019-08-18-cameras-installed-in-airline-seats-record-you.html

0
W HO Guest

It seems like CX has pulled the direct nonstop flight to EWR (CX 890) wef Feb. 10 until the end of Mar./Apr 1 Alternatives offered are to connect in the west coast airports & transfer to a domestic flight (AA/UA narrow bodies) Umm - no thanks. I'll just wait for CX to contact me re: the changes. My booking's still showing as intact for the end of the month.

0
coalharbour Guest

Lucky, your headline "puts employees on unpaid leave" suggests it is mandatory. However your article switched to "asks employees to take unpaid leave" which means to me it is voluntary. So which one is it?

0
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