Cathay Pacific freezes new hiring, to focus on cost cuts

Cathay last month swung to its first profit for the January-June period since 2016. (File/Reuters)
Updated 12 September 2019
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Cathay Pacific freezes new hiring, to focus on cost cuts

  • Cathay has said it will cut capacity for the upcoming winter season after reporting an 11.3% fall in passenger numbers for August
  • The weak demand and cuts to capacity will heap more pressure on Cathay and its new management

HONG KONG: Cathay Pacific Airways Ltd. has put a freeze on new hiring, according to an internal memo seen by Reuters, as the airline battles a slump in demand from fliers avoiding Hong Kong amid massive anti-government protests in the city.
In a memo to staff on Wednesday evening, new Chief Executive Augustus Tang said he had asked executives to examine spending and focus on cutting costs. The airline will also not replace departing employees in non-flying positions unless approved by a spending control committee, he said.
Cathay has said it will cut capacity for the upcoming winter season after reporting an 11.3% fall in passenger numbers for August. The airline does not expect September to be any less difficult, while analysts have projected it could swing to a loss in the second half.
Cathay shares fell 2.4% early on Thursday, lagging the benchmark Hang Seng Index that was down 0.4%.
The weak demand and cuts to capacity will heap more pressure on Cathay and its new management, appointed after CEO Rupert Hogg quit last month in a shock move and the resignation of Chairman John Slosar last week.
Cathay, which is trying to complete a three-year financial turnaround plan, has become the biggest corporate casualty of the Hong Kong protests after China demanded it suspend staff involved in, or supporting, the demonstrations that have plunged the former British colony into a political crisis.
Jefferies analyst Andrew Lee told clients he expected the airline could swing to a HK$973 million ($124.1 million) loss in the second half of the year. BOCOM International analyst Luya You said second-half earnings could be “notably dismal.”
Cathay last month swung to its first profit for the January-June period since 2016 and said at the time that the second half was likely to be better as usual due to seasonality.


Japanese officials cautious on prospects for US trade deal

Updated 17 September 2019
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Japanese officials cautious on prospects for US trade deal

  • A long-sought trade pact with Japan was scrapped when Donald Trump withdrew the US from a pan-Pacific trade agreement shortly after taking office in 2017
  • Trump said he preferred that Washington and Tokyo strike a bilateral deal

TOKYO: Officials in Japan appeared wary over the prospects for a trade deal with the US after President Donald Trump said he was prepared to sign a pact soon.
Japan’s chief government spokesman, Yoshihide Suga, said Tuesday that the two sides are still finalizing details after reaching a basic agreement in late August on trade in farm products, digital trade and other industries.
Suga said Trump and Prime Minister Shinzo Abe are considering signing a deal in late September when they attend the UN General Assembly in New York.
“We are accelerating the work that still remains,” he said. “But I decline to comment further because we have not reached a formal agreement.”
Trump’s notice to Congress, released by the White House on Monday, did not mention tariffs on autos and parts, long a sticking point between the two countries.
It said his administration was looking forward to collaborating with lawmakers on a deal that would result in “more fair and reciprocal trade” between the two countries.
Toshimitsu Motegi, who became foreign minister last week after negotiating the deal as economy minister, said Japan must watch carefully to prevent Washington from forcing any last-minute changes, Kyodo News agency reported.
The agricultural minister, Taku Eto, cautioned against letting down Tokyo’s guard until the final agreement is reached, it said.
A long-sought trade agreement with Japan was scrapped when Trump withdrew the US from a pan-Pacific trade agreement shortly after taking office in 2017.
Japan and the other 10 remaining members of the trade pact, the Trans-Pacific Partnership, then renegotiated their own deal without the US
Trump said he preferred that Washington and Tokyo strike a bilateral deal.
That resurrected the longtime issue of tariffs on Japanese car and auto parts exports to the US and of stiffer duties on US exports of farm and other products to Japan.