(Bloomberg) -- More than 25,000 Cathay Pacific Airways Ltd. staff are taking unpaid leave, underscoring the depth of the airline's troubles as it contends with the coronavirus.
Chief Executive Officer Augustus Tang said in an internal memo that Cathay's challenges “remain acute,” and he thanked employees for their support. The Hong Kong-based airline this month asked its 33,000 workers to take three weeks off between March 1 and June 30.
Most office staff have taken up the offer, but the acceptance rate is lower for pilots and cabin crew, according to a person familiar with the plans. Pilots are the most expensive employees for Cathay, said the person, who asked not to be identified discussing internal matters.
Cathay has already slashed capacity as the spread of the virus weighs on travel demand. The outbreak is a further challenge after protests in Hong Kong weighed on the company's performance in the second half of 2019. Cathay warned last week that results in the first six months of this year will be “significantly down” from a year earlier.
Cathay's shares fell 0.8% Wednesday in Hong Kong, declining for a fourth day. The stock has fallen 12% this year, though it's little changed since concern about the virus exploded in late January and the airline started halting flights. Cathay Dragon and Hong Kong Express are units of Cathay.
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Asian carriers may lose $27.8 billion in revenue this year because of the outbreak, which includes a $12.8 billion loss for Chinese airlines, according to the International Air Transport Association. Tens of thousands of flights that could've carried millions of passengers in and out of China have been canceled.
Cathay is particularly exposed because almost half its revenue comes from its base in Hong Kong and mainland China. The airline plans to slash 90% of its capacity to China in the next two months.
--With assistance from Kyunghee Park.
To contact the reporter on this story: Will Davies in Hong Kong at wdavies13@bloomberg.net
To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, Ville Heiskanen, Angus Whitley
©2020 Bloomberg L.P.
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