Hong Kong carrier Cathay Pacific Airways Ltd (國泰航空) yesterday posted a loss of US$703 million for last year, a massive improvement on the record loss sustained in 2020, even as the airline struggles with tough travel restrictions.
Cathay chairman Patrick Healy said the company “continued to face serious challenges” and the overall loss for the year was “substantial,” despite a considerable improvement in the second half.
Cathay’s result was a vast improvement from its record loss in 2020 of HK$21.6 billion (US$2.76 billion at the current exchange rate), which Healey described as the “most challenging” year in the airline’s seven-decade history.
Photo: Bloomberg
Cathay recorded an attributable loss of HK$5.5 billion for the whole of last year, recovering ground in the second half of the year with a HK$2 billion attributable profit.
“The exceptional performance of our cargo business, especially during the second-half peak season, was extremely encouraging,” Healy said.
The average estimate from analysts tracked by Bloomberg was for an annual loss of HK$9.8 billion.
Cathay also surpassed its own forecast in January, when it expected a net loss of HK$5.6 billion to HK$6.1 billion.
Hong Kong has imposed some of the world’s harshest travel restrictions under its “zero COVID” policy, isolating a territory that was once one of the world’s largest logistics and transportation hubs.
Cathay said that passenger numbers were down 85 percent from 2020, with the airline flying just 1,965 passengers per day on average last year, and a far cry from the 35.2 million transported in 2019 before the emergence of COVID-19.
Strict quarantine regulations for aircrew that Hong Kong imposed in February last year were “very demanding” and had a “substantial impact” on Cathay’s travel business, Healy said.
However, cargo was the bright spot, with revenue up 32 percent to HK$32.38 billion.
“Our cargo business performed exceptionally well,” Healy said, with Cathay’s freighter fleet operating at peak capacity toward the end of last year, supplemented by extra cargo-only passenger flight operations.
Hong Kong’s tight travel restrictions, with flights from several countries banned, are expected to continue to affect operations this year as the territory battles a massive outbreak of the Omicron variant of SARS-CoV-2.
“We have had an extremely challenging start to 2022,” Healy said.
For this year, Cathay said that it expects to operate at about 2 percent of its pre-COVID-19 passenger flight capacity, with the figure for cargo flight capacity remaining at less than one-third.
“Although we are still facing many challenges, we have the utmost confidence in the long-term future of Cathay Pacific,” Healy said.
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