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Cathay Pacfic issues profit warning as coronavirus chaos mounts

By Hugh Wilson

Hong Kong carrier slashes passenger capacity by 40 per cent for February and March

Cathay Pacific has warned of a “significant” drop in first half profits as the coronavirus takes a heavy toll on the Hong Kong carrier’s schedules.

The company issued the profit warning after cutting capacity by 40 per cent for February and March.

With travel bans to and from mainland China slashing passenger numbers, Cathay said flights in April were also likely to be affected.

The coronavirus outbreak hit at an already difficult time for the airline, after months of public unrest in Hong Kong saw traffic into the city slump by 46 per cent year-on-year in November and December.

Cathay also announced a 3.8 per cent reduction in passenger numbers for January compared to the same month in 2019, while cargo traffic tonnage fell by 8.9 per cent. But the company admitted that performance in the last week of the month had plummeted as the seriousness of the coronavirus outbreak started to become clear.

Ronald Lam, the airline’s chief customer and commercial officer, said: “This was the most challenging Chinese New Year period we have experienced. As the novel coronavirus outbreak in mainland China intensified towards the end of the holiday period, travel demand dropped substantially.

“With more governments worldwide having imposed travel restrictions on passengers from mainland China and in some cases Hong Kong, we are seeing continued cancellations of bookings.”

Coronavirus has affected a wide range of companies and, on Sunday, credit ratings agency Moody’s revised down its outlook for 2020 global growth by 0.2 per cent because of the outbreak.

FURTHER READING: Hong Kong protests explained: the impact on businesses

FURTHER READING: Will there be a global recession in 2020?

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