Cathay Pacific freezes new hiring, to focus on cost cuts

Cathay last month swung to its first profit for the January-June period since 2016. (File/Reuters)
Updated 12 September 2019

Cathay Pacific freezes new hiring, to focus on cost cuts

  • Cathay has said it will cut capacity for the upcoming winter season after reporting an 11.3% fall in passenger numbers for August
  • The weak demand and cuts to capacity will heap more pressure on Cathay and its new management

HONG KONG: Cathay Pacific Airways Ltd. has put a freeze on new hiring, according to an internal memo seen by Reuters, as the airline battles a slump in demand from fliers avoiding Hong Kong amid massive anti-government protests in the city.
In a memo to staff on Wednesday evening, new Chief Executive Augustus Tang said he had asked executives to examine spending and focus on cutting costs. The airline will also not replace departing employees in non-flying positions unless approved by a spending control committee, he said.
Cathay has said it will cut capacity for the upcoming winter season after reporting an 11.3% fall in passenger numbers for August. The airline does not expect September to be any less difficult, while analysts have projected it could swing to a loss in the second half.
Cathay shares fell 2.4% early on Thursday, lagging the benchmark Hang Seng Index that was down 0.4%.
The weak demand and cuts to capacity will heap more pressure on Cathay and its new management, appointed after CEO Rupert Hogg quit last month in a shock move and the resignation of Chairman John Slosar last week.
Cathay, which is trying to complete a three-year financial turnaround plan, has become the biggest corporate casualty of the Hong Kong protests after China demanded it suspend staff involved in, or supporting, the demonstrations that have plunged the former British colony into a political crisis.
Jefferies analyst Andrew Lee told clients he expected the airline could swing to a HK$973 million ($124.1 million) loss in the second half of the year. BOCOM International analyst Luya You said second-half earnings could be “notably dismal.”
Cathay last month swung to its first profit for the January-June period since 2016 and said at the time that the second half was likely to be better as usual due to seasonality.


Abu Dhabi carrier Etihad launches more fuel-efficient Boeing 787 Dreamliner

Updated 18 November 2019

Abu Dhabi carrier Etihad launches more fuel-efficient Boeing 787 Dreamliner

  • Etihad’s CEO Tony Douglas described the aircraft as a flying laboratory for testing that could benefit the entire industry
  • This year, Etihad flew the world’s first passenger flight using sustainable biofuel made from a plant that grows in saltwater

DUBAI: Abu Dhabi’s flagship carrier Etihad Airways announced on Monday it is launching one of the world’s most fuel-efficient long-haul airplanes as the company seeks to save costs on fuel and position itself as a more environmentally-conscious choice for travelers.
Etihad’s “Greenliner” is a Boeing 787 Dreamliner that will depart on its first route from Abu Dhabi to Brussels in January 2020. Etihad’s CEO Tony Douglas described the aircraft as a flying laboratory for testing that could benefit the entire industry.
With fuel costs eating up around a quarter of airline spending, Douglas said the goal of the Greenliner is to be 20 percent more fuel efficient than other aircraft in Etihad’s fleet.
“This is not just a box-ticking exercise,” he told reporters at the unveiling of the initiative at the Dubai Airshow alongside executives from Boeing.
Douglas said the aircraft “not only makes sense economically from a profit and loss account point of view, but because it also directly impacts the CO2 because of the fuel burn.”
Etihad has reported losses of $4.75 billion since 2016 as its strategy of aggressively buying stakes in airlines from Europe to Australia exposed the company to major risks.
Despite its financials, the airline continues to be among the most innovative.
This year, Etihad flew the world’s first passenger flight using sustainable biofuel made from a plant that grows in saltwater. It also became the first in the Middle East to operate a flight without any single-use plastics on board to raise awareness of the effects of plastic pollution.
Aviation accounts for a small but rapidly growing share of greenhouse-gas emissions — about 2.5 percent worldwide. But forecasters expect air travel to grow rapidly in the coming years.
Etihad says it plans to make the Greenliner a “social media star” to bring under sharper focus its developments and achievements worldwide. Douglas said anything that Eithad learns with Boeing from this aircraft’s operations will be open domain knowledge “because it’s about moving the industry forward in a responsible fashion.”
“We’re like a millennial and like all good millennials, they’re really focused on the environment and the sustainability agenda,” Douglas said, referring to Etihad’s 16 years in operation.
The Greenliner will be the only aircraft of its kind in Etihad’s fleet of Dreamliners. The company currently has 36 of the 787s in its fleet with plans to operate 50.
“This is a small step today, but in a very, very long journey,” Douglas said.