UPDATE 1-Hong Kong's Cathay defers delivery of 4 Airbus planes as demand falls

Hong Kong's Cathay Pacific Airways Ltd said on Thursday it would defer the delivery of four Airbus SE narrowbodies in 2020 as it cuts capacity to deal with falling demand due to anti-government protests in its home city.

In addition to delaying the arrival of three A321neos at regional arm Cathay Dragon and one A320neo at budget carrier HK Express, it said it would retire one Boeing Co 777-300ER and one Cathay Dragon A320 earlier than expected. The airline said on Wednesday the short-term outlook remained "challenging and uncertain" as it lowered its profit guidance for the second time in less than a month.

Anti-government protests paralyzed parts of Hong Kong for a fourth day on Thursday, forcing school closures and blocking highways and other transport links amid a marked escalation of violence. Cathay said the unrest was expected to lead to a small post-acquisition loss for HK Express, which it bought this year from the Chinese conglomerate HNA Group for HK$4.93 billion ($629.7 million).

The airline said last week it planned to allocate half its order for 32 A321neo aircraft to HK Express as it looks to grow in the budget market, but made no mention of any changes to the delivery schedule. An Airbus spokesman said delivery schedules change from time to time by mutual agreement with customers, declining to provide further details of the timing. ($1 = 7.8295 Hong Kong dollars)