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Cathay Pacific to cut capacity due to high fuel costs

May. 10, 2012 (China Knowledge) - Cathay Pacific Airways Ltd<0293>, Hong Kong's largest air carrier, is reducing costs, including the reduction of capacity, to cope with the high fuel prices and sluggish aviation industry, said CEO John Slosar.

In a statement, the Hong Kong-listed airline said it is readjusting the capacity of Cathay Pacific and Dragonair by cutting some long-haul flights, while introducing six new destinations in its regional network.

This year, the passenger capacity growth of Cathay Pacific Group is expected be reduced from targeted 7% to 3.2%. The growth for Cathay Pacific will be reduced to 2% from the targeted 7%, while for Dragonair is set to reach 9.2%, higher than targeted 7.3%.

For cargo capacity, Cathay Pacific expects to have a 4% increase in total, comprising freighters plus passenger aircraft bellies, down from the original target of 7%, and would see zero growth from targeted 3% in freighter capacity.

However, Cathay Pacific will still take delivery of 15 new aircrafts this year, six of which have been in operation. Cathay Pacific, which currently operates 25 wide-body freighters, including five new Boeing 747-8Fs, intends to receive three more such planes this year and two next year. For near-term capacity-management measure, the airline will take three Boeing 747-400BCFs out of service in 2012.

In addition, the airline will continue investing for long-term strategy, which include the delivery of 93 fuel-efficient aircraft with a value of HK$190 billion by 2019. A new cargo terminal at Hong Kong International Airport is expected to go into operation in early 2013 with an investment of HK$5.7 billion, said the company.

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