Cathay Pacific's annual loss shrinks to just $720 million.
Written byTimes Magazine
Cathay Pacific said its annual loss last year shrank to just $5.6 billion (£530 million; $720 million) even as Hong Kong remains under strict restrictions on coronavirus travel.
This is far less than the losses in 2020 and far less than analysts had predicted. This increase was due to solid freight demand and cost reduction measures.
But the company said it expects to burn up to HK$1.5 billion in cash a month since February after tightening quarantine rules for summer teams again. "While passenger travel continues to take a hit, demand for goods has been strong throughout the year," Cathay Pacific CEO August Tang said in a statement.
The airline expects to report an annual loss of HK$5.6 billion to HK$6.1 billion in 2021. That is much better than the market projecting a loss of more than HK$10 billion and a loss of HK$21.65 billion in 2020.
Looking ahead for the year, Cathay expects monthly losses of between HK$1 billion and HK$1.5 billion due to stricter quarantine rules for flight crew, which will force them to reduce cargo and passenger capacity further.
This month, the airline said it was operating about 2% of pre-pandemic passenger capacity and about 20% of pre-pandemic cargo capacity.
"Unfortunately, the reduction in capacity will impact Cathay Pacific's business, and we are currently evaluating the potential impact of this action on our operations and cost base," Tang said. Hong Kong, which is pursuing a zero-Covid strategy in line with mainland China's policies, has suspended transit flights from most of the world.
Last month, the government of the Asian financial hub announced stricter quarantine rules after two Cathay crew members who violated self-isolation measures were accused of causing the Covid-19 outbreak.
Hong Kong police said last week that two former flight attendants had been arrested and charged with violating the city's coronavirus restrictions.
The airline they worked for was not named, but the news came after Cathay fired two crew members suspected of violating Covid rules. Cathay pilots previously told the how the rules were impacting their mental health and taking a toll on their personal lives, with one saying he was "in a state of permanent quarantine."
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