Cathay Pacific to cut capacity due to high fuel costs

Cathay Pacific Airways Ltd, Hong Kong's largest air carrier, is reducing costs, including the reduction of capacity, to cope with the high fuel prices and sluggish aviation industry, said CEO John Slosar. In a statement, the Hong Kong-listed airline said it is readjusting the capacity of Cathay Pacific and Dragonair by cutting some long-haul flights, while introducing six new destinations in its regional network.

This year, the passenger capacity growth of Cathay Pacific Group is expected be reduced from targeted 7% to 3.2%. The growth for Cathay Pacific will be reduced to 2% from the targeted 7%, while for Dragonair is set to reach 9.2%, higher than targeted 7.3%. For cargo capacity, Cathay Pacific expects to have a 4% increase in total, comprising freighters plus passenger aircraft bellies, down from the original target of 7%, and would see zero growth from targeted 3% in freighter capacity. However, Cathay Pacific will still take delivery of 15 new aircrafts this year, six of which have been in operation. Cathay Pacific, which currently operates 25 wide-body freighters, including five new Boeing 747-8Fs, intends to receive three more such planes this year and two next year. For near-term capacity-management measure, the airline will take three Boeing 747-400BCFs out of service in 2012. In addition, the airline will continue investing for long-term strategy, which include the delivery of 93 fuel-efficient aircraft with a value of HK$190 billion by 2019. A new cargo terminal at Hong Kong International Airport is expected to go into operation in early 2013 with an investment of HK$5.7 billion, said the company.