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Cathay Pacific cuts capacity by 30% over coronavirus outbreak

 

 

 

As the first confirmed death from the coronavirus in Hong Kong is reported, and international airlines start suspending their flight to the city, Cathay Pacific announced it would reduce its flights to mainland China by 90%, cutting its overall flight capacity by about 30%.

The recent epidemic of coronavirus that started in Wuhan, east of mainland China, has had a dramatic effect over flight demand. Cathay’s passenger numbers have been cut in half, according to sources quoted by South China Morning Post.

In recent months, Cathay Pacific had already seen its traffic severely disminished. For November 2019, the airline was already reporting a 46% drop in incoming traffic to Hong Kong. After six months of protests, tourism in the city is at a record low. 

The situation almost got the best of another carrier, Hong Kong Airlines. Following reports of delayed wage payment to nearly half of its staff, the Hong Kong’s Air Transport Licensing Authority threatened to suspend its air operating certificate. But the airline was saved in extremis after the Chinese conglomerate HNA Group, the main shareholder, secured a $568M loan from state-owned banks.

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Seven Hong Kong Airlines planes seized by creditor

Hong Kong Airlines is not out of the woods yet. Two weeks after it received a cash injection from its main shareholder HNA Group, the airline reportedly saw seven of its aircraft impounded by the Hong Kong Airport Authority as guarantees.

 

The coronavirus outbreak, that has now infected more than 20,000 people and killed 427, has a major influence over the global aviation market. After closing their routes towards Wuhan, where the 2019-nCoV virus originated, multiple airlines have expanded their measures to the rest of mainland China, including Hong Kong.

British Airways has suspended all its flights to and from mainland China. The Indonesian airline Lion Air announced a similar measure. Lufthansa has extended the suspension from February 9, 2020, until the end of the month.

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