Flagship airline Cathay Pacific has announced that it would reduce its capacity in 2020 as the protests in Hong Kong continue.
Cathay Pacific said it would cut its capacity next year as the Hong Kong protests continue to affect inbound traffic to Hong Kong as well as regional flights.
According to Cathay, its inbound traffic to Hong Kong fell by 46% in November compared to last year. Meanwhile, its Cathay Dragon subsidiary, which handles regional flights, also posted 9% less passengers last month than they did a year prior. The decrease in passenger month is now in its fourth straight month.
Following the announcement, shares of the company fell by 1.6% on opening but was able to recover in mid-morning trade until it closed with a 0.2% increase.
In a filing with the Hong Kong Stock Exchange, Ronald Lam, chief customer and commercial officer for Cathay Pacific, wrote: "November continued to be very challenging for both Cathay Pacific and Hong Kong, with sentiment for travel still weak."
Lam said the airline has decided to reduce seat capacity by 1.4% in 2020, reversing its original plan of expanding capacity by 3.1%. He pointed out that this is the "first time in a long while" that Cathay will reduce its size.
Cathay Pacific has been battling various issues this year. In August, former chief executive officer (CEO) and chief commercial officer Rupert Hogg resigned following several weeks of criticism by Chinese state media. The company's stock price has declined by almost 20% from the high it recorded in April but it has slightly recovered this quarter.
Other airlines and travel companies have also been affected by the protests in the territory. Financial difficulties almost cost Hong Kong Airlines its flying license earlier this month while Hong Kong International Airport reported that the number of passengers who passed through the airport has fallen by 16.2% in November compared to last year, amounting to almost one million travelers.
