Hong Kong’s national carrier, Cathay Pacific Ltd, plans to ground six aircraft by the end of the year as sales slip by 27% due to the worldwide economic downturn in the airline industry.

“We still cannot see any signs of any pickup in business,” Chairman Christopher Pratt said in Hong Kong today. One passenger plane has already been parked along with a further five cargo carriers.

Cathay, like British Airways, has cut capacity and offered unpaid leave to its staff and is talking about delaying the delivery of new aircraft because of the global recession.  The airline had a run of losses this year, totaling $271 billion.

“Only a recovery in demand will help them make a profit in the second half,” said Allen Wong, an analyst at Quam Ltd. “It’s unlikely the carrier can save that much in fuel costs again as oil prices have already gone up a lot.”

The airline had a better than expected first half net income of HK$812 million compared with the loss of $760 million a year earlier.

Cathay Pacific’s passenger numbers have also fallen by 4.2$ to 11.9 million.  Passenger yield, a measure of average sales, plunged 20%, more than expected.  Cargo sales dropped by 15%.

“Full-year earnings will depend on a pick-up in premium traffic,” said Winson Fong, who helps manage about $2 billion at SG Asset Management H.K. Ltd. “Fuel-hedging gains really aren’t something to evaluate the company’s performance on.”

Cathay hoped to make a HK $475 million income based on forecasts, and now will not pay a dividend to shareholders.

Thanks to Bloomberg for the above quotes.  For more information visit their website.