Hong Kong’s flagship carrier Cathay Pacific is asking all staff to take three weeks' unpaid leave in the next few months in the wake of the deadly outbreak of the novel coronavirus, according to an internal video delivered by the company’s chief executive officer on Wednesday.
The airline said all of its 27,000 employees will have the option to take “special unpaid leave” on a voluntary basis between March and June.
Preserving our cash is now the key to protecting our business
Augustus Tang Kin-wing,
Cathay Pacific's chief executive officer
The outbreak of the novel coronavirus has made the airline’s business environment challenging as the number of travelers has fallen, including those flying between Hong Kong and the mainland, said Cathay’s CEO Augustus Tang Kin-wing. He added that the Lunar New Year holiday is normally one of the most profitable periods of the year.
“Preserving our cash is now the key to protecting our business,” he said, appealing to every employee to help.
The last time the carrier implemented such a leave scheme was in 2009 during the global financial meltdown. Cathay said the situation the company is facing now is just as serious as at that time.
The airline said in a statement to the stock exchange that Cathay Pacific and Cathay Dragon would progressively suspend about 90 percent of its flights to the mainland. In the next two months, there will also be significant reductions depending on market conditions. It is estimated that the airline’s capacity will be reduced by about 30 percent.
The declining number of visitor arrivals to Hong Kong has plunged the city’s tourism industry into a dire situation. Timothy Chui Ting-pong, executive director of Hong Kong Tourism Association, said there were almost no tourists in the SAR after the Lunar New Year holiday.
Wong Chi-wai, who runs Southeast Asian tour groups, said his company has suffered a loss of HK$4 million. The number of tour groups had been expected to rebound to 20 or 30 in January, but most were canceled due to the outbreak of the coronavirus.
Chui said he hopes the Hong Kong Monetary Authority will ask banks to support the tourism industry by permitting them to only pay interest on their mortgage loans for nine months and to shorten the approval process for small- and medium-size enterprises to just one month.
