Hong Kong carrier Cathay Pacific Airways Ltd (國泰航空) yesterday reported that its losses had narrowed in the first half after an “extremely difficult start” to the year, but said its capacity would improve in coming months as travel sentiment improves.
Its US$637 million loss in the January-to-June period was narrower than the US$968 million deficit it reported in the same period last year, as the airline benefited from robust cargo demand and cost-cutting measures.
Cathay chairman Patrick Healey said in a statement that the first few months were “particularly unfavorable” as travel restrictions related to the COVID-19 pandemic severely constrained Cathay’s flight operations and greatly affected demand for travel.
Photo: Bloomberg
However, he added that the airline was gearing up for the reopening of borders and expected a better second half.
Cathay aims to boost passenger flight capacity to one-quarter of pre-pandemic levels by the end of this year, while it is looking to lift cargo capacity to 65 percent, Healey said.
The airline carried 335,000 passengers in the first half of the year, more than double that recorded in the same period last year, bringing in US$263 million in revenue. Income from the cargo unit jumped 9.3 percent to US$1.5 billion.
Total revenue was up 17 percent year-on-year at US$2.4 billion.
Hong Kong has taken tentative steps toward reopening its borders after being internationally isolated for two-and-a-half-years owing to strict COVID-19 rules for travelers.
However, Cathay’s ability to operate more flights “continues to be severely constrained by a bottleneck on crewing resources under the existing quarantine requirements,” Healey said.
Last month, Hong Kong also suspended a circuit-breaker mechanism that penalized airlines for bringing in COVID-19 cases — which had affected numerous Cathay routes, including for key markets such as the UK and US.
The airline operated just 29 destinations in January, compared with more than 100 before the pandemic.
Hong Kong authorities are hinting at a potential international reopening in November, timed to coincide with the high-profile Hong Kong Sevens rugby tournament and a banking summit.
Cathay is bringing aircraft parked overseas back to Hong Kong and is aiming to hire more than 4,000 frontline employees over the next 18 to 24 months, Healey said.
In June, Hong Kong also extended the drawdown period of a US$1 billion bridge loan to Cathay — the second time in two years — as part of a US$5 billion government bailout to help the airline weather the pandemic.
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