Cathay Pacific plans to cut capacity and ask staff to take unpaid leave as sales from passenger and cargo flights dropped 22.4 per cent in the first quarter amid a deep recession.

The Hong Kong carrier, which has slashed prices in various routes to drum up demand, said on Friday it would reduce passenger capacity by 8 per cent from next month while Dragonair, its China-focused arm, will see a 13 per cent cut. Cargo capacity will be lowered by 11 per cent.