Hong Kong’s Cathay Pacific Airways Ltd (國泰航空) yesterday said it would defer the delivery of four Airbus SE narrow-body aircraft next year as it cuts capacity to deal with falling demand due to pro-democracy protests in the territory.
In addition to delaying the arrival of three A321neos at regional arm Cathay Dragon (國泰港龍) and one A320neo at budget carrier HK Express Airways Ltd (香港快運航空), it said that it would retire one Boeing Co 777-300ER and one Airbus SE A320 earlier than expected.
The short-term outlook remains “challenging and uncertain,” the airline said on Wednesday, as it lowered its profit guidance for the second time in less than a month.
Yesterday, pro-democracy protests again paralyzed parts of Hong Kong, forcing school closures as well as blocking highways and other transport links.
Cathay has said it plans to cut capacity by 6 to 7 percent in the short term by reducing flight frequencies rather than taking the costlier step of parking airplanes.
BOCOM International Holdings Co (交銀國際控股) analyst You Luya (尤璐雅), who attended an analyst briefing yesterday, said that management “did not rule out more extreme measures — grounding aircraft, severing leases, canceling orders — if the situation in Hong Kong deteriorates or extends significantly beyond expectations.”
“At present, they seem fairly confident that short-term cost measures are enough,” You said.
The airline plans to allocate half its order for 32 A321neo aircraft to HK Express as it looks to grow in the budget market, Cathay said last week, without mention of changes to the delivery schedule.
Delivery schedules occasionally change by mutual agreement with customers, an Airbus spokesman said, without additional details.
Cathay said that unrest in Hong Kong is expected to lead to a small post-acquisition loss for HK Express, which it bought this year from Chinese conglomerate HNA Group Co (海航集團) for HK$4.93 billion (US$629.82 million).
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