High Fuel Prices: Cathay Pacific Announces Further Capacity Redeployment

Cathay Pacific Airways announced a new round of capacity redeployment to help offset the impact of high fuel prices on the airline.

The move includes reducing the number of the flights to North America by 10, while adding eight new flights to Australia and upgrading to a bigger aircraft for 14 European flights each week. Overall, the changes result in no change in planned capacity at the airline.

This is the second wave of redeployment brought about by the need to limit the impact of high fuel prices and switch aircraft to routes with greater revenue potential. In July the carrier announced it will add four new flights a week to Dubai and Bahrain, while reducing Toronto services by three a week and Vancouver by four a week. In addition, New Zealand will go back to a twice-daily service from the winter while the service between Hong Kong and Riyadh will fly direct, rather than route through Bahrain.

Cathay Pacific Chief Executive Tony Tyler stated, "The extent of the impact fuel prices are having on our business was underlined when we announced a loss of HKD663 million in our interim results last week. We have to maximize our earnings during this difficult period which is why are moving our capacity. However, while we are reducing services on some routes, we will continue to maintain the integrity of our network, reshaping it where necessary to ensure we fly aircraft to where we can cover our costs and also make some money."

In the latest redeployment, the carrier will suspend the daily CX884/5 service to and from Los Angeles with effect from October 26, 2008. The route will then operate as a double-daily service until winter 2009 when the suspended service will be reinstated on four days a week, moving back to daily by December 2009.

In Canada, the Vancouver route will be served by 14 flights a week instead of 17 as the CX836/5 service will be suspended from October 26, 2008. The airline currently operates three flights daily but this will drop to 17 with effect from 16 September.

Consistently high demand to Australia is leading the airline to considerably enhance its services to the country. Perth will become a daily service with two additional flights a week from October 26, 2008, while Brisbane will move from a daily service to 10 flights a week. Sydney, currently served by 25 flights a week, will move to four flights each day.