Business travel poll 1998: A hard landing in Asia
Flush with optimism, Asia's airlines ordered new aircraft worth billions of dollars. Then came the crisis. Companies are cutting back on business travel, tourists are staying at home - and the airlines still have to service their debts. Hotel chains, tour operators and the world's big aircraft manufacturers are suffering too. Chris Wright reports.
For many years, Cathay Pacific Airways has epitomized the confidence and expectations of a prosperous new Asia. Hong Kong's flagship carrier has grown with its home continent, challenging the world's best on service, efficiency and style. Alongside south-east Asian neighbour Singapore Airlines it reflects a wealthy, mobile, demanding and discerning clientele, the product of economic success.
Times change. In January, Cathay Pacific Airways announced 760 redundancies, on top of 550 announced late in 1997 as a result of the airline's move from Kai Tak to Hong Kong's new Chek Lap Kok airport in July 1998. A February edition of its in-house weekly magazine offered bleak reading: "January's results provide a clear indication that there will be a very difficult year ahead. The advance loads for the coming few months are worrying."
Analysts are in vocal agreement. In February alone, Nikko Securities, ING Barings and Merrill Lynch put out reports questioning the strength of Cathay stock. In a report entitled "Cathay Pacific: a turbulent long-haul flight", ING Barings analyst Nam Park cut his earning forecasts for the airline by 45.2%