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Cathay Pacific has warned that rising geopolitical tensions and a global recession are likely to compound the pressures from coronavirus that drove the Hong Kong airline to a record loss. The company said on Wednesday that lost HK$9.9b ($1.3b) in H1, confirming figures released in a profit warning last month. That compared to a profit of HK$1.3b over the same period last year. Cathay, which unveiled a $5bn government-backed rescue plan in June, added it did not expect a “meaningful recovery” in passenger numbers for some time, citing the impact of global travel restrictions and quarantine measures. “This is the biggest challenge to the aviation industry that Cathay Pacific has ever witnessed,” said Patrick Healy, the carrier’s chairman. “With a global recession looming, and geopolitical tensions intensifying, trade will probably come under significant pressure, and this is expected to have a negative impact on both air travel and cargo demand,” Healy added. The health crisis has piled pressure on Hong Kong’s flag carrier, which was already grappling with fallout from the social unrest that swept across the territory in 2019 and a trade war between the US and China. The cargo business has been a rare bright spot for Cathay this year. Revenues from the division increased 8.8% year on year to HK$11.2b despite a fall in overall tonnes transported, as fewer planes in the air drove up prices.<br/>

British Airways and Heathrow Airport clashed with unions over the extent of pay cuts the firms say are necessary if they’re to ride out a deep slowdown in travel triggered by the coronavirus crisis. The GMB union said Wednesday that an outline deal touted as a breakthrough by BA had resulted from a “shameful” threat to fire staff and hire them back on worse terms. Unite separately wrote to members saying Heathrow was employing similar tactics to enforce hefty pay cuts out of “greed not need.” The labour tussle follows a collapse in traffic at what’s usually Europe’s busiest air hub as a rebound from the pandemic is held back by a U.K. recession and a government quarantine policy that’s putting people of traveling. Both BA and Heathrow say they need to downsize the workforce and slash costs for remaining staff to prepare for years of depressed demand. BA CEO Alex Cruz said in an internal memo to staff that both the GMB and Unite had signed formal accords in principle on new terms for engineers and customer-facing staff at Heathrow. He hailed the development as indicative of “significant progress” that would reduce the number of job cuts. The GMB said it would put the proposals to members while accusing BA of acting in “bad faith” by dangling a proposed process of dismissal and rehiring to force through “glorified zero-hours contracts” involving additional pay cuts and a lay-off clause.<br/>