Coronavirus causes Cathay Pacific to ask employees to take unpaid leave

As the coronavirus continues to spread across Asia, Cathay Pacific Airlines has asked its all of its 27,000 employees to take three weeks of unpaid leave.

The action, which is voluntary, comes as demand for travel has fallen precipitously amid reduced schedules and increased fear among travelers. The airline, which is the flagship carrier of Hong Kong, said preserving cash is “key to protecting” its business.

Cathay Pacific also announced a 30% cut in services over the next two months, including eliminating roughly 90% of its flights to mainland China. The company is also asking suppliers to cut prices and has instituted a hiring freeze for now.

While Cathay Pacific is the first airline in the region to ask employees to take unpaid leave, it might not be the last. The Chinese government has discouraged travel and demand for flights to the country has plunged as the disease has spread.

Hong Kong Airlines has also cut flights to the mainland and Singapore Airlines (and its low cost subsidiary Scoot) has reduced its capacity on selected routes in the country. In China itself, China Southern Airlines, Air China and others have reduced capacity as well.

Multiple U.S. carriers, including Delta Air Lines, American Airlines, and United Airlines have largely (or completely) suspended service to mainland China since the outbreak, but those carriers are less dependent on the routes and the moves are unlikely to affect employees.