‘Under intense pressure’: Cathay Pacific chief calls for hiring freeze as passenger and cargo businesses drop
CEO says “the revenue shock is beginning to be felt”, as the carrier records a drop in passenger numbers and reports “intense pressure” on cargo business profitability
Cathay Pacific Airways’ chief executive has called on all departments in the company to curb spending by “stopping all non-essential discretionary expenditure,” freeze hiring or replacing “non-operationally critical staff,” and to review operational budgets.
“It is now necessary for us to contain costs further,” chief executive Ivan Chu Kwok-leung told staff, according to the company’s internal magazine CX World released on Tuesday.
Chu said business challenges have become more acute in recent weeks, with continued pressure on its cargo business being compounded by “a weakening trend in the passenger business”.
The company said it was not considering laying off staff in response to an emailed query.
Passenger volume at Cathay Pacific and its subsidiary Dragonair declined 0.1 per cent in April compared to the same month last year, according to operational data released on Tuesday. The company said passenger demand weakened in general across most of its markets served and competition increased. Load factor, a measure of capacity utilisation, dropped 2.3 percentage points to 84.9 per cent in the month.
Chu said yield, a measure of unit profitability, is “coming under ever-more pressure” at the airline.
Cathay had seen high growth of passenger traffic at the back of its planes while demand for its premium cabins fell below expectations.
