Cathay Pacific reports slump in revenue

Hong Kong airline Cathay Pacific said yesterday its first-quarter revenue from passenger and cargo services fell 22.4 per cent from a year ago, a month after posting dismal results for last year.

In a statement to the Hong Kong Stock Exchange, the carrier said the airline and its subsidiary Dragonair would reduce planned passenger capacity by eight percent and 13 per cent respectively from May this year.

Overall planned cargo capacity would be reduced by 11 percent, the statement said.

Due to the dismal results, the statement said the company is "requesting its staff to take periods of unpaid leave over the course of the next 12 months".

The development follows Cathay's announcement in March that it lost more than one billion US dollars last year, its first annual loss in a decade as it struggled with soaring fuel prices and falling cargo business.

Like other airlines, the global downturn left Cathay stuck with money-losing fuel contracts - signed when oil prices were high before the slowdown kicked in.

The airline reported a net loss of €1.2 billion for last year, a dramatic turnaround from the previous year's profit of seven billion dollars.

In a sign of the falling demand, earlier this year the airline shelved plans to build a new cargo terminal at Hong Kong International Airport for two years.