Hong Kong carrier Cathay Pacific Airways Ltd (國泰航空) yesterday said it suffered a record US$2.8 billion loss last year as the COVID-19 pandemic wiped out demand for travel — and the airline warned of a long road to recovery ahead.
Cathay chairman Patrick Healy described last year as the “most challenging” in the airline’s 70-year history and said much would depend on how effective and widespread global vaccination programs are.
“It is by no means clear how the pandemic and its impact will develop over the coming months,” he said, adding that the group expected passenger traffic to remain “well below” half of pre-pandemic levels throughout this year.
Photo: EPA-EFE
The company’s losses were higher than estimates compiled by Bloomberg News.
Cathay racked up an attributable loss of HK$21.6 billion (US$2.8 billion) for last year, going deeper into the red as the year wore on.
Its second-half losses clocked in at HK$11.8 billion, up from HK$9.9 billion in the first six months of last year when the pandemic first emerged.
As the pandemic spread, the airline went on a cost-cutting spree, closing its Cathay Dragon (國泰港龍) subsidiary, making about 8,500 redundancies and slashing executive pay.
With the help of a government bailout Cathay underwent a recapitalization in July last year that raised HK$39 billion.
However, passenger numbers have been about 98 percent below pre-pandemic levels since April, and for much of last year the company was burning through cash at a rate of up to HK$1.5 billion a month.
By the end of last year, Cathay’s shares had fallen 29 percent.
In yesterday’s annual report, Cathay said it had managed to reduce the cash burn toward the end of the year, but longer quarantine restrictions that Hong Kong placed on all long-distance flight crew in January was now canceling out most of those savings.
Cathay said it would keep executive pay slashed and ask staff to go on a third round of unpaid leave — to which about 80 percent of employees have already signed up.
Its liquidity at the end of last year was HK$28.6 billion and Cathay also issued HK$6.74 billion in convertible bonds in January to secure more funds.
Hong Kong managed to keep COVID-19 infections comparatively low by bringing in strict quarantine measures for all arrivals early on in the pandemic.
Currently, most of those arriving in the territory must quarantine in a hotel for 21 days, one of the longest mandatory quarantine periods in the world. Outbound travel is almost non-existent, and there is little sign of those measures being lifted any time soon.
Last week, the head of Hong Kong’s tourist board said it could be at least six months before residents would be able to travel again.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last