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Cathay Pacific to cut 2020 capacity by 1.4% - memo

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By Reuters
Cathay Pacific to cut 2020 capacity by 1.4% - memo
FILE PHOTO: A passenger walks to the First Class counter of Cathay Pacific Airways at Hong Kong Airport in Hong Kong, China April 4, 2018. REUTERS/Bobby Yip   -   Copyright  BOBBY YIP(Reuters)

SYDNEY (Reuters) – Hong Kong carrier Cathay Pacific Airways Ltd <0293.HK> plans to cut capacity by 1.4% next year, reversing an earlier plan for a boost of 3.1% because of a challenging business outlook, an internal memo seen by Reuters showed.

The plan comes after the company this month cut its second-half profit guidance for the second time, after prolonged anti-government protests that began in Hong Kong in June.

“Given the immediate commercial challenges and the fact that our position has deteriorated in recent weeks, we must take swift action to adjust our budget operating plan for 2020 downwards again,” Chief Executive Augustus Tang said in the memo.

“Put another way, rather than growing our airline in 2020, for the first time in a long time, our airline will reduce in size.”

A Cathay representative said the airline had no comment.

Several Asian airlines have also cut flights to Hong Kong, as protests in the financial hub and an escalating China-U.S. trade war have pushed the Chinese-ruled territory into recession for the first time in a decade.

(Reporting by Jamie Freed in Sydney; Writing by Miyoung Kim; Editing by Clarence Fernandez)