Cathay says downturn prompts terminal delay from 2011 to 2013

CATHAY Pacific has revealed it has received approval from the Airport Authority of Hong Kong to delay the completion of its new cargo terminal to mid-2013 from 2011 because of the economic downturn.

The Hong Kong carrier said in a statement that its subsidiary, Cathay Pacific Services, had signed an agreement with the authority to defer the project, adding that the delay would not exceed 24 months.

The deferral is aimed at better matching supply and demand in the air freight business given the current market outlook, the company said. It is also important for the company to maintain a strong balance sheet until the market strengthens.

Cathay added that it would compensate the authority for the delay, saying it would be fair and reasonable, without disclosing an amount.

A spokesman for the authority said in a separate statement that it had accepted Cathay's proposal after assessing the change in demand forecast for air cargo services, reported Agence France-Presse. He said the delay would not undermine Hong Kong's status as a leading regional and international air cargo hub.

Source: Schednet