Hong Kong carrier Cathay Pacific Airways Ltd (國泰航空) yesterday said that it lost HK$9.9 billion (US$1.27 billion) in the first half of this year as the COVID-19 pandemic sent passenger numbers tumbling, eviscerating its business.
“The first six months of 2020 were the most challenging that the Cathay Pacific Group has faced in its more than 70-year history,” chairman Patrick Healy said in a stark statement announcing the results.
“The global health crisis has decimated the travel industry and the future remains highly uncertain, with most analysts suggesting that it will take years to recover to pre-crisis levels,” he added.
Photo: AFP
Before the pandemic struck, Cathay was one of Asia’s largest international airlines and the fifth-largest air cargo carrier globally.
However, like others worldwide, it has been battered by the evaporation of global travel.
The firm said it carried 4.4 million passengers in the first six months of this year — a 76 percent plunge year-on-year — as the new disease burst out of central China and then spread around the world.
At the height of the global lockdowns in April and May, its entire fleet was averaging just 500 passengers a day.
Cargo remained the lone bright spot, rising 9 percent year-on-year to HK$11.2 billion. Demand was driven up by a squeeze on space for cargo, which is often carried in the hold of passenger planes.
Cathay is especially vulnerable, as it has no domestic market to fall back on, and it was already under pressure after months of huge protests in Hong Kong last year caused passenger numbers to plunge.
It was also punished by Beijing last year when some of its 33,000 employees expressed support for Hong Kong’s pro-democracy movement.
Healy said this year had started promisingly, with signs that demand was beginning to return after the sometimes-violent protests had put travelers off visiting the territory.
In response to the pandemic, Cathay has tried to save cash by reducing capacity, cutting executive pay, introducing voluntary leave schemes and slashing other non-essential costs.
It has so far refrained from any large-scale job cuts.
The Hong Kong government also came to its rescue early this year with a HK$39 billion recapitalization plan.
Healy predicted little optimism for business picking up any time soon, quoting the International Air Transport Association as saying global travel is unlikely to reach pre-pandemic levels until at least 2024.
He said Asia-Pacific airlines were likely to suffer for longer given spiraling tensions between the US and China.
“With a global recession looming, and geopolitical tensions intensifying, trade will likely come under significant pressure, and this is expected to have a negative impact on both air travel and cargo demand,” Healy said.
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