Struggling Hong Kong carrier Cathay Pacific Airways Ltd (國泰航空) yesterday reported a US$972 million net loss in the first six months of this year, as the COVID-19 pandemic continues to hammer demand for travel.
While the figure is an improvement on the US$1.3 billion loss in the same period last year, the airline said that its outlook remained uncertain due to ongoing struggles to battle the disease.
Cathay Pacific chairman Patrick Healy said that this year continues to be the “toughest period” in the airline’s 70-year history, but the progress of global COVID-19 vaccination drives provided some encouragement for the industry.
Photo AFP
“COVID-19 will continue to have a severe impact on our business until borders progressively open and travel constraints are lifted,” he said.
With no domestic market to fall back on, Cathay Pacific has been among the worst-hit of the major global airlines.
In the midst of the pandemic last year, the Hong Kong government came to the rescue with a major bailout.
Hong Kong has kept COVID-19 cases low by effectively sealing itself off to most of the world for the past 18 months, a move that has kept people safe, but crippled the travel industry.
Earlier this month, authorities lifted some of those restrictions, meaning that visitors without work visas or residency would now be able to enter Hong Kong.
However, they still have to undergo between seven and 21 days of hotel quarantine depending on where they came from.
Cathay Pacific carried just 157,000 passengers in the first half of the year, 96 percent fewer than in the same period last year.
The firm made just US$96 million from passenger flights during that period, with its air cargo business keeping the airline on life support, generating four-fifths of revenue.
Healy said that the firm hoped to be operating at about 30 percent of its pre-pandemic passenger capacity by the fourth quarter of this year.
However, much would depend on “operational and passenger travel restrictions being lifted,” he said. “As governments have stated, this is only going to be possible when sufficiently high vaccination levels are achieved. The progress of vaccination is encouraging, but the pace and timing of recovery remain uncertain.”
Cathay Pacific posted a record loss of US$2.8 billion last year.
It has slashed its workforce through redundancies, early retirements and shutting down overseas pilot crew bases in five countries.
Bloomberg Intelligence analyst James Teo said that Cathay’s outlook for the second half of the year looked more positive.
“It’s not just the reopening, but also since their Europe flights are seeing 40 percent load factor in June and China flights are also not bad at 29 percent. This could improve with the reopening,” he said, referring to Hong Kong gradually relaxing its entry rules.
Cathay Pacific shares rose 1.61 percent in afternoon trade yesterday, following the release of the firm’s earnings report.
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