Left Menu
Development News Edition

'Situation as grave as 2009 financial crisis': Cathay Pacific pushes for unpaid leaves


'Situation as grave as 2009 financial crisis': Cathay Pacific pushes for unpaid leaves
Representative Image Image Credit: Pixabay

HIGHLIGHTS

  • Hong Kong's Cathay Pacific Airways asked its 27,000 employees to take three weeks of unpaid leave from March.
  • The carrier had said it planned to cut about 30% of capacity, including about 90% of flights to mainland China.
  • Chief Executive Augustus Tang said that the situation amid coronavirus crisis was as grave as 2009 financial crisis.

Hong Kong's Cathay Pacific Airways asked its 27,000 employees to take three weeks of unpaid leave, saying preserving cash was key for the carrier and that conditions were as grave as during the 2009 financial crisis due to the virus outbreak.

Cathay is also asking suppliers for price reductions, putting in place hiring freezes, postponing major projects and stopping all non-critical spending, Chief Executive Augustus Tang said in a video message to staff seen by Reuters. On Tuesday, the carrier said it planned to cut about 30% of capacity over the next two months, including about 90% of flights to mainland China.

Cathay had already experienced a sharp fall in demand since the middle of last year due to widespread, sometimes violent anti-government protests in Hong Kong. The virus, which has led to a death toll of nearly 500, has led to a further drop in visitors and passengers transiting through Hong Kong's airport.

"This has been one of the most difficult Chinese New Year holidays we have ever had," Tang said in the video. "We don't know how long this will last. With such an uncertain outlook preserving our cash is now the key to protecting our business." A few hours after the video was released, Hong Kong leader Carrie Lam announced any visitors from mainland China would need to undergo a compulsory quarantine for 14 days.

Cathay said in a statement it was appealing to all employees to participate in the unpaid leave scheme that will run from March 1 until June 30. Tang said it was the first time the company had offered an unpaid leave scheme since 2009 when demand plummeted due to a global financial crisis.

"We had the overwhelming support of our employees," he said, about the 2009 scheme. "It made an enormous difference. The situation now is just as grave and I ask for the same commitment to the future from you." The left scheme, first reported by the South China Morning Post, is not mandatory but employees are encouraged to take it, a spokeswoman said.

Cathay shares closed 2.7% higher on Wednesday following the announcement of capacity cuts which came after the market closed on Tuesday. In a note to clients, Jefferies analysts estimated the airline would report a loss in the first half of 2020 before returning to a profit in the second half, assuming traffic rebounds as it did with the 2003 SARS epidemic.

(With inputs from agencies.)

Download The Devdiscourse News App for Latest News.


TRENDING

OPINION/BLOG/INTERVIEW

Future of Food: Technology fostering the road to global food security

Technological innovation can help address most of the pressing issues facing the world today including food security by enhancing productivity, improving financial services, managing resources, addressing environmental concerns, etc....

Conspiracy theories on COVID 19: Legislators, Scientists, and Journalists all joined the Caravan

Conspiracy theories are not new for virus epidemics. There have been conspiracy theories on HIV-AIDS, Polio Vaccines, Ebola Virus, and several other diseases as well. However, what makes the 2019 Novel Coronavirus different from others is ...

Now it’s a war, Uganda deploys army to combat locust swarms

Its for the first time after 1986, the locust swarms have attacked Uganda twice in a season. With the increasing number of countries of Africa under attack by locust swarms, the problem seems to have taken a regional paradigm. Its very diff...

Top 10 Fake News, Myths and Realities on 2019 Novel Coronavirus COVID 19

With nearly 1500 deaths by January 14 and around 65,000 infections in China, the Novel Coronavirus 2019 has become one of the worst health epidemics of the 21st Century. However, 8,573 people have been cured but the rumor mongers are a...

Videos

Latest News

Spurs to cap 8-game road trip against Thunder

The San Antonio Spurs eight-game road trip got off to a rough start. The Spurs started the trip with a five-game losing streak, but they have picked themselves off the mat with back-to-back victories entering Sundays finale of the long trip...

NFL notebook: Ravens’ Martindale to be highest-paid DC

The Baltimore Ravens signed Don Wink Martindale to a new three-year deal that makes him the NFLs highest-paid defensive coordinator, NFL Networks Ian Rapoport reported Saturday. Financial terms were not disclosed.Martindale, 56, spent six s...

World champion Marquez admits shoulder injury worry

World motorcycling champion Marc Marquez admitted that his long-standing shoulder problem hampered his performance on the opening day of pre-season testing on Saturday. Honda rider Marquez, a six-time champion in the sports elite class, was...

Real's Hazard at risk for City clash after latest injury

Eden Hazard came off injured during Real Madrids La Liga match away at Levante on Saturday, four days before their crunch Champions League clash with Manchester City. Hazard was substituted in the second half in Valencia after he had been l...

Give Feedback