BREAKING NEWS

Cathay Pacific cuts profit guidance for second time amid Hong Kong protests

Cathay Pacific cuts profit guidance for second time amid Hong Kong protests
FILE PHOTO: A Cathay Pacific flight flies over the city of Hong Kong, China September 6, 2019. Picture taken September 6, 2019. REUTERS/Amr Abdallah Dalsh/File Photo -
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Amr Abdallah Dalsh(Reuters)
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(Reuters) – Hong Kong’s Cathay Pacific Airways Ltd <0293.HK> on Wednesday said the short-term outlook remained “challenging and uncertain” due to anti-government protests in its home market as it lowered its profit guidance for the second time in less than a month.

The airline said passenger numbers fell 7% in October and it now expected second-half profit to be “significantly below” the first half’s HK$1.347 billion (134.4 million pounds), in a step up from the wording “below” used last month.

Hong Kong anti-government protesters on Wednesday paralysed parts of the Asian financial hub for a third consecutive day, with some transport links, schools and many businesses closing after an escalation of violence.

“Overall we foresee a challenging remainder of 2019 for our airlines,” Cathay Chief Customer and Commercial Officer Ronald Lam said in a statement on Wednesday.

“Looking ahead, our advanced bookings continue to show weakness in both inbound and outbound Hong Kong traffic for the rest of 2019, partly offset by moderately increased transit passengers via Hong Kong.”

Cathay reduced passenger flight capacity by 2-4% versus its original schedule between August and October and made further cuts of 6-7% for November and December, Lam said.

The percentage of seats filled dropped by 4 percentage points to 77.6% in October despite the capacity cuts, airfares were under pressure and premium travel demand was sluggish, he said.

The airline is expected to hold an analyst briefing on Thursday, the first under a new management team led by Chief Executive Augustus Tang after the airline’s former head, Rupert Hogg, resigned in August after a crackdown by China’s aviation regulator.

Some analysts have already forecast the carrier will report a loss in the second half.

(Reporting by Jamie Freed in Sydney and Niyati Shetty in Bengaluru, editing by Louise Heavens and Kirsten Donovan)

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