Cathay Pacific shares skid after major operations review underwhelms

HONG KONG (Reuters) - Shares of Cathay Pacific Airways Ltd slid nearly 6 percent after a strategic review by the Hong Kong carrier of its operations left investors bemoaning a lack of detail, including whether jobs and flights might be cut to save money.

The shares were down 4.8 percent at HK$10.30 by the midday beak, the lowest since Dec. 30, after Cathay emailed results of its biggest business review in two decades to employees late on Wednesday.

Cathay's chief executive Ivan Chu said the firm would "grow efficiently by keeping our costs per available tonne kilometres flat as we expand our productivity."

The airline said it would cut jobs and consider moving some flights to its shorter-haul unit.

But the apparent lack of clarity and urgency on where costs might be cut in the face of accelerating competition left analysts and investors concerned.

"It was disappointing without seeing any concrete detail on how it can build a more efficient organisation at a time when it still faces serious challenges, in particular from budget airlines," said Linus Yip, chief strategist from First Shanghai Securities.

Cathay is under pressure to combat aggressive mainland Chinese carriers, and to position itself to compete against the backdrop of an "open skies" deal signed last month between China and Australia.

"By the time CX (Cathay Pacific) takes action, the competitive landscape will have changed so much that it is no longer recognisable," one aviation industry official said on Thursday, speaking on condition of anonymity.

Cathay said in a press statement on Thursday that changes to the way the company was organised would start at the top, and it would focus on speeding up decision making and making the airline more responsive to customer needs.

"2017 is going to be a year of significant change and an opportunity to better align our business with the increasingly competitive aviation landscape," Cathay added.

In August, the carrier posted an 82 percent slide in first-half net profit amid slower Chinese economic growth and falling consumer demand for premium class seats on long-haul routes.

(Reporting by Donny Kwok and Jamie Freed; Editing by Kenneth Maxwell and Jacqueline Wong)