Cathay Pacific’s U.S. Cabin Crew Bases Shutting Down

Cathay Pacific Shutting Down U.S. Cabin Crew Bases

Cathay Pacific, which struggled financially before coronavirus, is hard hit by the virus.  The Hong-Kong based airline cut 96% of its flights after the coronavirus pandemic began sweeping the world.  Now, the Hong-Kong based airline is shutting down its U.S. cabin crew bases, leaving 286 unemployed, according to the South China Morning Post.

In a memo to employees on Friday, the airline informed them of the news.  The shut down will impact employees in Los Angeles, New York, and San Francisco.  Cathay Pacific closed its Vancouver, Canada base in March, and it closed its Toronto base last year.

The move is not entirely shocking given the airline’s struggles.  Cathay Pacific typically flies about 120 flights a week to the United States.  Currently, Cathay Pacific only has two flights a week to Los Angeles, its only destination in the U.S.  The airline typically flies to major cities across the United States including Dallas, New York, Washington, Boston, and others.

Passengers on Cathay Pacific Reduced by 90%

Cathay Pacific reported a substantial reduction in passengers in March, with a reduction in 90% of passengers in comparison to March 2019.  According to new data, the airline is flying 302 passengers per day.  In comparison, the airline typically flies 100,000 passengers a day.

I can speak a little to this reduction based on personal experience.  In mid-March, I flew Cathay Pacific to Jakarta.  Originally, I was scheduled Dulles-Hong Kong-Jakarta, but Dulles was canceled.  Cathay routed me through Los Angeles.  The aircraft from Los Angeles to Hong was not very empty.  However, the flight from Hong Kong to Jakarta on an Airbus A350 had about 40 passengers on board. On the return flight from Hong Kong to Los Angeles, there were four people in the premium economy cabin and coach was very empty.

Here is the business class cabin from Hong Kong to Jakarta in mid-March:

And here was the premium economy cabin on the return flight from Hong Kong to Los Angeles:

Bottom Line

Airlines around the world are adjusting to significant changes in their passenger base, while also dealing with issues of money flow.  But for airlines like Cathay Pacific who already struggled before the coronavirus outbreak, this will be an even more difficult time.  In March, the Hong Kong government announced a HK$2.6 billion ($335 million USD) aid package for the struggling airline.  Cathay Pacific said at the time that it was not enough money.

The crisis is causing airlines to find cashflows as much as possible.  U.S. airlines are receiving stimulus money for payrolls, and there is a new round of loan applications due this week for U.S. airlines.