Cathay Pacific Airways Ltd, Hong Kong's largest carrier, will cut flights for a third time in less than two weeks as a deadly respiratory disease makes people reluctant to fly.
Cathay, which cut capacity by 14 percent last week, will again reduce the number of seats available by the end of this week, said Chief Executive David Turnbull in an interview. The latest reduction will be ``much more than 14 percent,'' he said.
"They may cut even more capacity in the next couple of months," said Henry Lee, who manages more than US$50 million at Hendale Group Ltd. "So a recovery may not be happening until the third quarter of this year."
Cathay joins other Asian carriers, including Korean Air Co, Singapore Airlines Ltd and All Nippon Airways Co, which have cut about 300 flights between them in response to the virus and the war in Iraq. American Airlines, the world's largest carrier, and Continental Airlines Inc are also suspending flights.
Tourists and business people are shunning Hong Kong because of severe acute respiratory syndrome, or SARS, which has killed 23 people in the city and at least 100 globally. The World Health Organization has issued an advisory telling people not to travel to Hong Kong and Guangdong province in southern China, where health authorities believe the virus originated.
"It's the biggest commercial hit I would think in the company's history," Turnbull said. "We've got no market for business. There's much less inbound and people are leaving."
Cathay is filling 30 percent to 35 percent of its seats with paying passengers on the reduced schedule, Turnbull said.
Cathay shares, which have dropped 7 percent this year, fell as much as 2 percent to HK$9.70 as of 12:29pm.
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