Cathay's bumpy ride confirmed

Business | Reuters 14 Nov 2019

Cathay Pacific Airways sees its short-term outlook remaining "challenging and uncertain" due to the continuing protests in its home market, and with that statement the carrier lowered its profit guidance for the second time in less than a month.

Passenger numbers fell 7 percent in October, Cathay revealed, and it now expects second-half profit to be "significantly below" the first half's HK$1.34 billion.

That is a hardening of its reading on prospects, having said simply "below" last month.

"Overall we foresee a challenging remainder of 2019 for our airlines," Cathay chief customer and commercial officer Ronald Lam said.

"Looking ahead, our advanced bookings continue to show weakness in both inbound and outbound Hong Kong traffic for the rest of 2019, partly offset by moderately increased transit passengers via Hong Kong."

Cathay reduced passenger flight capacity by 2-4 percent versus its original schedule between August and October and made further cuts of 6-7 percent for November and December, Lam said.

He added that the percentage of seats filled dropped by 4 percentage points to 77.6 percent in October despite the capacity cuts while fares were under pressure and premium travel demand was sluggish.

The airline is expected to hold an analysts briefing today - the first under a new management team led by chief executive Augustus Tang after the airline's former head, Rupert Hogg, resigned in August after a crackdown by China's aviation regulator. Some analysts have already forecast the carrier will report a loss in the second half.

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