jakob
Apr 14, 03, 1:57 am
Analysts have played down the prospect of Cathay Pacific Airways grounding its entire fleet.
According to the RTHK Web site, the airline's director of corporate development Tony Tyler said the airline would have to respond to circumstances, but stressed it had no plans to ground its fleet.
Mr Tyler also said the airline was trying its best to avoid laying off staff.
Bank of China International's head of transport and logistics research Michael Chan said: "Financially, Cathay is one of the strongest airlines in the world although it has been badly hit in the Sars crisis.
"Everything is a possible option but grounding its [entire] fleet is quite unlikely.
"Cathay has reduced more than one-third of its capacity so far and there's room for a further cut."
Pierre Lau, an analyst with Nomura International, said: "I am not worried about Cathay's financial position.
"I think Cathay can hold up well, given it has HK$13 billion cash on hand. Plus its gearing ratio only stands at 30 per cent, meaning it can arrange bank loans if needed.
"Even if it runs a loss for three consecutive months, its survival won't be a problem.
"I am sure it will put up measures to stop bleeding (losing money)."
Cathay had liquid funds of HK$13.18 billion at the end of last year, enough to hold up the airline for 563 days even if it continues to lose US$3 million a day - a figure disclosed in Cathay's internal memorandum that was leaked to the media last Saturday.
The memorandum suggested Cathay "will have to consider grounding the entire passenger fleet" if passenger volume falls to fewer than 6,000 per day.
Mr Lau said the airline would be cautious in considering a suspension in passenger fleet operations because such a move would hurt the image of Hong Kong.
"Hong Kong would be isolated from the rest of the world if passenger services were stopped," he said. "It would create a negative impact on Hong Kong."
ANNETTE CHIU
http://biz.scmp.com/bizmain/ZZZ2ECRV6ED.html
According to the RTHK Web site, the airline's director of corporate development Tony Tyler said the airline would have to respond to circumstances, but stressed it had no plans to ground its fleet.
Mr Tyler also said the airline was trying its best to avoid laying off staff.
Bank of China International's head of transport and logistics research Michael Chan said: "Financially, Cathay is one of the strongest airlines in the world although it has been badly hit in the Sars crisis.
"Everything is a possible option but grounding its [entire] fleet is quite unlikely.
"Cathay has reduced more than one-third of its capacity so far and there's room for a further cut."
Pierre Lau, an analyst with Nomura International, said: "I am not worried about Cathay's financial position.
"I think Cathay can hold up well, given it has HK$13 billion cash on hand. Plus its gearing ratio only stands at 30 per cent, meaning it can arrange bank loans if needed.
"Even if it runs a loss for three consecutive months, its survival won't be a problem.
"I am sure it will put up measures to stop bleeding (losing money)."
Cathay had liquid funds of HK$13.18 billion at the end of last year, enough to hold up the airline for 563 days even if it continues to lose US$3 million a day - a figure disclosed in Cathay's internal memorandum that was leaked to the media last Saturday.
The memorandum suggested Cathay "will have to consider grounding the entire passenger fleet" if passenger volume falls to fewer than 6,000 per day.
Mr Lau said the airline would be cautious in considering a suspension in passenger fleet operations because such a move would hurt the image of Hong Kong.
"Hong Kong would be isolated from the rest of the world if passenger services were stopped," he said. "It would create a negative impact on Hong Kong."
ANNETTE CHIU
http://biz.scmp.com/bizmain/ZZZ2ECRV6ED.html