Cathay Pacific’s first half loss drops nearly a quarter, air freight demand robust
- Announces loss of $ 973 million in first six months
- Through cost-cutting measures, freight demand
- Analysts expect improvement in H2
Aug.11 (Reuters) – Cathay Pacific Airways Ltd of Hong Kong (0293.HK) on Wednesday announced that its first-half loss had shrunk by nearly a quarter, helped by drastic downsizing and strong demand for air cargo .
But Cathay, which lacks a domestic market, remains hard hit by border closures linked to the pandemic, with passenger income falling 93% in the first six months of the year.
“COVID-19 continued to pose significant challenges for the Cathay group in the first half of 2021 and this continues to be the most difficult time in our history,” President Patrick Healy said in a statement.
It posted a net loss of HK $ 7.57 billion ($ 973 million), in line with the company’s forecast that it would be a little lower than the previous year.
This included HK $ 500 million in impairment charges mainly related to 11 stranded aircraft that are not expected to be returned to service as well as HK $ 403 million in restructuring costs.
On a positive note for the airline, Healy said demand for air freight, which has seen yields rise 24% and accounted for 80% of all revenue, is expected to continue to be robust.
Cathay expects to reduce its monthly cash consumption in the second half of the year as rules are relaxed for vaccinated crews and passenger capacity increases to 30% from pre-COVID levels in the fourth quarter. Read more
It is likely to report a loss of HK $ 9.85 billion in a full year, based on the average of 14 estimates compiled by Refinitiv, which would represent a markedly improving second half.
Last year, the airline cut costs with the loss of 5,900 jobs and also ended its regional brand Cathay Dragon. It has since transferred the remaining pilots and cabin crew to lower paying contracts and closed pilot and flight attendant bases abroad, resulting in further job losses.
The remaining Hong Kong-based pilots and cabin crew have been told they need to be vaccinated by August 31 or risk losing their jobs. The airline said last month that 94% of pilots and 76% of cabin crew had booked or received vaccines.
($ 1 = 7.7824 Hong Kong dollars)
Reporting by Jamie Freed in Sydney; Editing by Edwina Gibbs
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