Cutting on long haul and focusing on short haul will not make it easy for Cathay, as low cost Asian airlines are resurgent all around it.
Cathay Pacific will cut passenger capacity 1.6 percent next year, the first reduction since 2009, as it contends with slowing international travel demand and a need to train pilots for new aircraft.
The carrier is boosting its focus on short-haul routes and premium-economy cabins as the slowdown saps demand for premium-class long-haul flights to cities including New York. The airline also last week told staff it was stepping up cost-cutting measures because of the inter-continental slowdown, a cargo slump and higher fuel prices.
The long-haul capacity reduction “implies a lack of confidence as well as a repositioning of the company’s strategy,” UOB-Kay Hian’s K. Ajith and Eugene Ng said. “The focus towards short-haul is fraught with risk, especially given that various low-cost carriers have expanded in the region.”