Cathay shares resume slide as flight cancellations compound woes

[HONG KONG] Shares of Hong Kong flag carrier Cathay Pacific Airways, which tumbled to a 10-year low on Monday, extended their slide after the carrier cancelled hundreds of flights in the wake of the abrupt closure of Hong Kong's airport.

The stock fell as much as 5.4 per cent and was down 4.2 per cent at HK$9.39 at 10.29am in Hong Kong, headed for its lowest close since April 2009. The airline's parent, Swire Pacific, also dropped.

The flight cancellations compounded the headwinds facing the company, which has emerged as the most visible corporate target for China amid the protests that have been gripping the former British colony for more than two months. Bocom International Holdings cut its investment rating on the stock, citing near-term uncertainties.

China hit out at the airline last week after its employees joined anti-Beijing protests in Hong Kong. Some state-run Chinese companies have also told employees to stop flying Cathay flights, according to people familiar with the matter.

Flights resumed Tuesday at the Hong Kong airport a day after a massive pro-democracy rally there forced the shutdown of the busy international transport hub, although the administrator warned that flight movements would still be affected. Despite the airport reopening, Cathay said it had cancelled over 200 flights to and out of the airport on Tuesday, according to its website.

BLOOMBERG