Cathay to defer new plane purchases<\/p>\n
HONG KONG (AFP): Cathay Pacific Airways is to defer options on
\nnew aircraft because of the slump in regional tourism caused by
\nAsia's financial crisis, a company spokeswoman said yesterday.<\/p>\n
Cathay may also sell some of its older planes because of the
\neconomic downturn, she said. \"We're looking into the possibility,
\nbut nothing is confirmed,\" the spokeswoman commented.<\/p>\n
The purchases have not been canceled just delayed by one or
\ntwo years. The spokeswoman also said the move only affected some
\nof its 25 options to buy Boeing and Airbus jets.<\/p>\n
Cathay is still committed to taking delivery of 13 new
\naircraft over the next two years. Next year the Hong Kong airline
\nwill take four Boeing 777-400s, five Airbus 340-300s, and one
\nAirbus 330-300 worth a total of HK$11.5 billion (US$1.49
\nbillion).<\/p>\n
On Monday, David Turnbull, Cathay Pacific's group managing
\ndirector, said the airline's balance sheet remained strong, but
\nthe \"dreadful state\" of regional economies and a major tourism
\ndownturn had badly hit business.<\/p>\n
Turnbull said in the airline's weekly corporate newsletter
\nthat such factors may undermine the airline's business outlook
\n\"for some time to come.\"<\/p>\n
\"It's quite clear that we cannot just continue doing what we
\ndo and what we were doing and simply hope it will get better. We
\nhave to change,\" Turnbull said.<\/p>\n
\"Over the years, we have become quite bureaucratic. We need to
\nspeed things up. We need to have less management by committee.\"<\/p>\n
The airline is reviewing its organizational structure and
\nneeds \"to streamline it and make ourselves come out even
\nstronger,\" Turnbull said.<\/p>\n
The airline will adopt a \"more cautious approach\" given the
\nbackground of the economic environment, Turnbull said.<\/p>\n
Asian economies have run into a downturn since the flotation
\nof the Thai baht in July sparked off a regional currency crisis.<\/p>\n
Hong Kong has been battling a slump in tourism since it was
\nhanded over by Britain to China on July 1.<\/p>\n
In November, the Hong Kong Tourist Authority (HKTA) said
\ntourism receipts in the nine months to September fell 9.2 percent
\nyear-on-year to HK$ 55.4 billion (US$7.14 billion).<\/p>\n
Cathay's first half profits fell 35 percent to HK$1.06 billion
\nHong Kong because of the tourism decline.<\/p>",
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