Cathay to sell 5 Boeing jets, sees tough outlook
HONG KONG, Oct 31 (Reuters) - Cathay Pacific (0293.HK) plans to "dispose of" or sell five Boeing (BA.N) 777-200 aircraft and warned of slowing bookings in the rest of 2008, according to an internal report, as the carrier scrambles to cut costs in a worsening travel and aviation environment.
In a report obtained by Reuters, Asia's fifth-largest airline stressed however that the capacity lost would be replaced eventually and it would continue to grow its fleet.
Chief Executive Tony Tyler admitted in the report that the cash from a sale would come in useful, but added the airline was not certain a deal could go through in the current weak climate.
A Cathay spokeswoman declined to comment on the report.
"The outlook remains very challenging with continued stress on the premium segment and weakening demand in the economy cabin. This means consistently weaker forward bookings for the rest of the year compared to 2007," Tyler said in the report.
Cathay also said that in the week ended Oct 25, net revenue from passenger services, cargo and mail and excess baggage came in 4.4 percent below an unspecified target.
Aviation analysts warned this week that Asian airlines will fail as tourism in the region slows and a worsening global economic outlook leads carriers such as Singapore Airlines (SIAL.SI) to cut back flights. [ID:nSIN353347]
The financial crisis is moving into the real economy as layoffs hurt consumer sentiment, leading airlines from China to India to post losses or layoff staff and hoteliers to focus on budget travellers as the luxury market takes a hit. (Reporting by Joanne Chiu, editing by Jeffrey Hodgson)
