Cathay Pacific has warned of a substantial loss in the first half of the year and flagged more capacity cuts due to the coronavirus outbreak.
The Covid-19 outbreak has forced the airline to ground more than half its fleet and request aircraft delivery delays.
The carrier has been at the forefront of a global slump in travel demand due to the epidemic, compounding a hit it took in the second half of 2019 from widespread anti-government protests in Chinese-ruled Hong Kong.
"Travel demand has dropped substantially and we have taken a number of short-term measures in response. These have included a sharp reduction of capacity in our passenger network," Cathay Chairman Patrick Healy said.
"Despite these measures we expect to incur a substantial loss for the first half of 2020," he added.
Cathay, which said 80% of employees agreed to take three weeks of unpaid leave to cut costs, added it does not rule out job cuts as the virus situation unfolds.
It has already grounded more than 140 planes and slashed capacity by two thirds across its network for March and April compared to earlier plans for a 40% cut.
Earlier this month, Cathay carried 82% fewer passengers than usual on Cathay Pacific and its regional arm Cathay Dragon, chief financial officer Martin Murray told analysts.
The company flagged that substantial passenger capacity and frequency reductions were likely for May as well, adding it was "difficult to predict when these conditions will improve".
The flu-like coronavirus, which can be transmitted from person to person, originated in China late last year and spread to more than 60 countries since then.
It has infected over 100,000 people and killed more than 4,000 globally.
Cathay is flying empty passenger planes filled with cargo to help make up for the one-third of its cargo capacity that has been lost through flight cuts across its network, its chief customer and commercial officer Ronald Lam said.
Cathay said it was cautiously optimistic about the air cargo market, where rates have risen sharply in recent weeks.
However, given overall weakness in the sector, Cathay said it was talking to both Airbus and Boeing about potentially delaying aircraft deliveries.
But for now Cathay said it is still receiving new aircraft and that it hopes to add capacity once demand returns.
It was due to take delivery of 17 A350 and A320neo family planes from Airbus and lessors this year.
Cathay said it had unrestricted liquidity of HK$20 billion and it expected to remain a going concern.
CFO Murray said there was no need for a cash call yet but he could not rule that out if the situation deteriorated.
For 2019, the airline reported a 28% plunge in earnings to HK$1.69 billion ($218m), in line with market estimates.
Cathay's major shareholders include Swire Pacific, Air China and Qatar Airways.
