Cathay to reduce cargo capacity 11%

Cathay to reduce cargo capacity 11%    Cathay Pacific Airways said Friday it would reduce cargo capacity by 11 percent from May, along with other cost-cutting measures, as demand for air freight worsens this year.
   Among other measures, the airline and sister carrier Dragonair will ask staff to take unpaid leave of one to four weeks. The capacity cuts, meanwhile, will see weekly freighter flights cut from 124 per week during the 2008 peak to 84, while the airline is also cutting passenger services by 8 percent, resulting in a loss of belly cargo capacity.
   Cathay said it is also negotiating the sale of five aircraft and will park two more of its Boeing 747-400BCF freighters — taking the total to five — and wet-lease one freighter to subsidiary Air Hong Kong.
   'We anticipate an extremely challenging year in 2009 and a toxic combination of low fares, a big drop in premium travel, weak cargo loads, poor yields and a negative currency impact is making it more important than ever to preserve cash,' said Tony Tyler, Cathay Pacific chief executive officer, in a statement. 'In the first quarter of 2009 we saw a marked deterioration in our business compared to the same period last year. Turnover for the first three months of this year was 22.4 percent lower than the same quarter in 2008.
   'We have no option but to take measures that will help us weather the current storm and maintain the long-term sustainability of the business.'
   Passenger services being cut includes routes from Hong Kong to London, Paris, Frankfurt, Sydney, Singapore, Bangkok, Seoul, Taipei, Tokyo, Mumbai and Dubai. Dragonair, which only operates passenger services in Asia, will cut capacity by 13 percent.