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Cathay Pacific asks 27,000 employees to take unpaid leave as coronavirus outbreak hit demand

Cathay Pacific asks 27,000 employees to take unpaid leave as coronavirus outbreak hit demand

FILE PHOTO: A Cathay Pacific Boeing 777-300ER plane lands at Hong Kong airport after it reopened following clashes between police and protesters, in Hong Kong, China Aug 14, 2019. (Photo: REUTERS/Thomas Peter/File Photo)

HONG KONG: Hong Kong's flagship carrier Cathay Pacific is asking its entire workforce to take up to three weeks of unpaid leave, its CEO announced on Wednesday (Feb 5), as the airline battles a fall in demand caused by a coronavirus outbreak.

The request lays bare desperate times at Cathay, which was hammered last year by months of political chaos and protests in Hong Kong and is now being further hurt by the fallout from the virus outbreak.

On Tuesday, the carrier said it planned to cut about 30 per cent of capacity over the next two months, including about 90 per cent of flights to mainland China.

READ: Coronavirus outbreak: Hong Kong to quarantine all visitors from mainland China

In a video message to the company's 27,000 employees, airline boss Augustus Tang said they were being asked to take up to three weeks leave with no pay between March and June.

"I am hoping all of you will participate, from our frontline employees to our senior leaders, and share in our current challenges," he said.

The leave is not mandatory, a spokeswoman for Cathay said in a separate statement, but it is encouraged.

The coronavirus, which was first detected in the central Chinese city of Wuhan late last year, spread over the Chinese New Year holiday, which would normally be one of the busiest times for regional airlines.

Instead, dozens of international carriers have reduced or suspended flights to China in a bid to halt the pathogen's spread and as passenger numbers fall off a cliff.

Tang warned Cathay was experiencing "one of the most difficult Chinese New Year holidays we have ever had" because of the virus.

"And we don't know how long it will last," he added. "With such an uncertain outlook, preserving our cash is now the key to protecting our business."


He announced a series of measures to tackle the crisis, including asking staff to voluntarily take unpaid leave.

"I realise this is difficult to hear, and we may need to take further steps ahead, but by supporting the special leave scheme you will be helping at our time of need," he told staff.

He also asked suppliers to reduce their prices, and said the airline would make short-term adjustments to its capacity - including an already announced move to cut flights 30 per cent worldwide for two months, including a 90 per cent cut to mainland China.

The last time Cathay asked staff to take unpaid leave was in 2009 in the wake of the global financial crash.

"The situation now is just as grave," Tang said.

Hong Kong's economy is currently in recession, battered by the US-China trade war, the protests, and the virus outbreak have hit the tourism and entertainment industries especially hard.

The World Health Organization (WHO) has declared the outbreak a global health emergency

The coronavirus has spread rapidly in China with nearly 25,000 people infected and 490 deaths, most in Wuhan and the surrounding province of Hubei.

Hong Kong reported its first coronavirus death on Tuesday. 

Nearly 230 cases have been reported in 27 other countries and regions outside mainland China, according to a Reuters tally based on official statements from the authorities involved.

Several countries have also reported human-to-human transmission of the coronavirus, including in Singapore and Thailand.

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Source: AGENCIES/nr


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