HONG KONG (AFP) — Cathay Pacific said Friday it will slash flights and ask all 17,000 staff to take unpaid leave, as the Hong Kong carrier announced a 22 percent drop in first-quarter revenue. The announcement came just weeks after Cathay said it had lost more than a billion US dollars in 2008, the company’s first full-year loss in a decade, due to the global slowdown as well as hedging bets on fuel prices that went wrong.

"Our staff are being asked to make sacrifices that will be needed to see the company through this violent storm," chief executive Tony Tyler said. "The pain will be shared from the top down." The airline, one of the biggest in Asia, said that all staff would be asked to take up to four weeks of unpaid holiday in the coming 12 months.

Like other carriers around the world, it is also trying to scale back capacity in line with weaker demand caused by the downturn, and said it was cutting services to major destinations across Asia and in Europe. Cathay will make ad hoc cancellations of 17 round trips to London in May, with more likely in June, and cut its twice-daily service to Paris to one flight a day from September.

It will also reduce flights or capacity to Frankfurt, Sydney, Singapore, Bangkok, Seoul, Taipei, Tokyo, Mumbai and Dubai. Its China-focused unit Dragonair will suspend flights to Fukuoka, Dalian, Shenyang, Guilin and Xian while reducing services to Bengaluru, Busan, Sanya and Shanghai.

Airlines across Asia have been hit hard in the current climate. Flag carrier Air China said Friday it had booked a net loss of 1.4 billion dollars in 2008. On Thursday China Eastern airlines, the third-biggest airline in China, said it lost 2.2 billion dollars last year and earlier in the week, Australia’s Qantas announced 1,750 more job cuts after eliminating 1,500 last July.

Cathay’s union of flight attendants said it did not know if the unpaid leave scheme was "fair and justifiable" but acknowledged the carrier, an iconic brand in the southern Chinese city, was facing trouble. "We are willing to lend a hand during these difficult times," union chairwoman Becky Kwan told AFP. The airline said first-quarter revenue from passenger and cargo services fell 22.4 percent year on year. In March it announced a loss of 8.6 billion Hong Kong dollars (1.1 billion US) last year — after a seven billion Hong Kong dollar profit the previous year — as it was hit by soaring fuel prices and falling cargo business.

Like other airlines, the global downturn has left Cathay stuck with money-losing fuel contracts — signed when prices were high before the slowdown kicked in. Earlier this year the airline shelved plans to build a new cargo terminal at Hong Kong International Airport for two years.

Copyright © 2009 AFP