Cathay Pacific flags USD 1.3bn first-half loss
Hong Kong’s Cathay Pacific Airways Ltd announced on July 17 that it expects a first-half net lack of HKD 9.9 billion (USD 1.03 billion), including impairment charges on 16 planes, as the coronavirus pandemic crushed travel demand.
Earlier, the airline had flagged a “substantial” first-half loss and that it had burned through cash of HKD 2.5 billion to HKD 3 billion every month since February.
The estimated first-half loss will be Cathay’s biggest half-yearly loss in at least ten years and comes even close to a HKD 1.35 billion profit in the first half of 2019, before widespread anti-government protests and the virus decimated demand.
“The landscape of international aviation remains incredibly uncertain with border restrictions and quarantine measures still set up across the globe,” Ronald Lam, Chief Customer and Commercial Officer, Cathay, said in a statement.
The airline, which last month received a USD 5 billion rescue package led by the Hong Kong government, said it planned to operate 7 per cent of normal passenger capacity in July, rising to around 10 per cent in August.
It will require a HKD 2.4 billion impairment charge alongside its half-year results that mainly relates to 16 planes that are unlikely to re-enter meaningful service before the 2021 summer season, the company said.
Prior to the announcement on July 17, Cathay was likely to post a HKD 12.6 billion full-year loss in 2020, according to reports.
The airline said it could make tough decisions by the fourth quarter after reviewing all areas of its business design, including aircraft orders.
It has accepted government employment subsidies that prevent it from cutting Hong Kong-based staff through August.
Cathay said this month it had been evaluating whether to send a few of its aircraft to less humid places for storage since it reviews how big is its fleet in light of the fall demand.
