Hong Kong airline Cathay Pacific may struggle to hire staff fast enough to ramp up capacity. If its people problem lasts, it will reflect poorly on the Asian hub, says t__shum
Captains and First Officers quit the airline in droves after pay cuts and being forced to endure near perpetual quarantine thanks to the city’s now-abandoned draconian quarantine rules for aircrew. The company has close to 2,405 pilots, roughly 63% of pre-pandemic numbers, according to a survey conducted in March by the Hong Kong Aircrew Officers Association and seen by Breakingviews. Investors are not encouraged, and sold shares down 3.6% on Thursday.
Offering higher salaries would be an obvious fix but tough for an airline yet to return to profit. The enterprise is worth 16% less than before the pandemic and its market value is up 7%, logging just a fifth of the gains by rival Singapore Airlines . Rightly or wrongly, the strength of a carrier is often seen as underpinning the strength of its home hub. That makes Cathay’s people problem Hong Kong’s too.Hong Kong carrier Cathay Pacific on March 8 reported an annual loss of HK$6.5 billion for 2022, from HK$5.5 billion the previous year.
“By the end of March, as a Group, we will be operating approximately 50% of pre-pandemic passenger flight capacity and serving more than 70 destinations. This will increase to 70% of pre-pandemic levels by the end of 2023, covering more than 80 destinations. And we aim to restore capacity fully to pre-pandemic levels by the end of 2024,” Chairman Patrick Healy said at a media briefing.Editing by Una Galani and Katrina HamlinOpinions expressed are those of the author.
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