Transport Airlines

Cathay Pacific to cut long haul capacity in face of slowing international travel demand

Excerpt from Bloomberg

Nov 28, 2012 4:34 am

Skift Take

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.

— Rafat Ali

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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.”

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