HONG KONG — Struggling Hong Kong carrier Cathay Pacific on
Wednesday said its losses in the first half of the year narrowed to $972
million but warned its outlook remained uncertain as the coronavirus pandemic
continues to hammer international travel.
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The figure is an improvement on the $1.3 billion loss suffered in the same
period last year and reflects a concerted cost-cutting regime that has seen
headcount slashed and overseas pilot bases closed.
Despite the steep loss, shareholders were buoyed by the results with Cathay
surging 3.6 percent in Hong Kong trade.
Chairman Patrick Healy said 2021 continued to be the "toughest
period" in the airline's 70-year history, but the progress of global
vaccination drives provided some encouragement for the industry.
"Covid-19 will continue to have a severe impact on our business until
borders progressively open and travel constraints are lifted," he warned.
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 Hong Kong's government came to the
rescue with a major bailout.
Hong Kong has kept coronavirus 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
visitors without work visas or residency would now be able to travel to the city.
But they will still have to undergo between seven and 21 days of hotel
quarantine depending on where they have come from.
Cathay Pacific carried just 157,000 passengers in the first half of the
year, 96 percent fewer than in the same period in 2020. The company made just
$96 million from passenger flights during that period.
Instead, it is air cargo kept the airline on life support, generating four
fifths of revenue.
Healy said the firm hoped to be operating at around 30 percent of its
pre-pandemic passenger capacity by the fourth quarter of this year.
But much will depend on "operational and passenger travel restrictions
being lifted".
"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,"
Healy added.
Cathay suffered a record $2.8 billion loss 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 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.
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