In an internal memo to staff, CX
boss Turnbull said that the airline's situation was becoming increasingly serious. Cash was being burned through and the airline may reach a situation where it has to sell planes.
"In the most dramatic warning issued by a regional airline to date, Mr Turnbull wrote in an internal email that the airline's $HK11 billion ($2.18 billion) in cash reserves was being consumed daily. He raised the spectre of having to mortgage or sell aircraft if the SARS (severe acute respiratory syndrome) epidemic did not ease.
Mr Turnbull said Cathay's banks were not easing loan repayments, aircaft manufacturers had offered limited assistance and some suppliers would not help."
This last paragraph is particularly interesting - and surprising. Of course, no one knows how it's going to end up, but surely CX
is a very good bet once things do pick up. SARS will be dealt with; it's just a matter of time and if one manufacturer were to be particularly supportive of CX
during this bad time, wouldn't it reap rewards later. Similarly, if another were not so helpful . . .
I really, really do feel for CX
. It would be a tragedy for such a fine airline to be struck down because of something beyond its control and I sincerely hope SARS is dealt with as soon as possible, for the sake of the industry generally.
It's strange that when we went into 2003, UA
was on its knees and CX
/SQ flying high. Now one might argue that these two are in worse condition than CX