15 January 2009

Cathay outlook gloomy and getting worse

HONG KONG - Cathay Pacific carried 0.3% fewer passengers in December with CEO Tony Tyler warning that the outlook "may get worse".

Yields are under pressure, although the carrier has not disclosed any figures.

In an in-house staff magazine, the CEO stated, "the numbers of passengers actually paying proper First and Business class fares is now very low, whatever the on-board loads may look like".

He added the airline has also put some "very cheap deals into the market to shore up the back-end of the plane".

Tyler said the "only glimmer of good news" is the fact that fuel prices have fallen so much, "but the reason for that is the weak world economy, which is also the cause of our revenue problems".

The airline's capacity growth to North America has dropped into negative territory in recent months, following massive expansion earlier in the year - a strategy that has floundered in the global economic downturn.

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