HONG KONG. Hong Kong flag carrier Cathay Pacific Airways warned yesterday that it was facing its gravest situation in 26 years because of the SARS virus and war in Iraq.
In a letter to staff, chief executive David Turnbull said the company had already cut 25% of flights and expected the number to rise to one third.
“Cathay Pacific has now entered its most dangerous time in terms of its commercial future in the 26 years I have been in the company,” Turnbull wrote.
“Over the last six years we have weathered many storms, but the combination of atypical pneumonia and the war in the Middle East has annihilated our passenger bookings.”
Last week the airline announced what it said was a temporary reduction of flights to nine destinations in Asia as passenger demand for seats slumped.
Hundreds of flights in and out of Hong Kong have been cancelled since the World Health Organisation last week advised against unnecessary travel to the territory and Guangdong province of southern China.
“Tourism confidence in Hong Kong has been shattered and it will take some time to rebuild after things have settled down,” Turnbull said.
The turnaround in the airline’s fortunes has been dramatic. On March 5 Cathay announced a six-fold increase in net profits for 2002. Amid the escalating SARS concerns, Turnbull warned that the airline faced longer term worries from the impact of the Iraq war.
“We must be mindful of the fact that the war in the Middle East could result in a more fundamental long-term general recession,” he wrote.
