Hong Kong’s Cathay Pacific Airways posts loss of nearly HK$5 billion for first half of 2022, 33.9% down from figure in same period last year

Hong Kong’s Cathay Pacific Airways has announced a loss of HK$4.99 billion (US$636.8 million) in the first half of 2022, 33.9 per cent down from the same period last year amid a strong rebound in passenger flights.

The figure revealed on Wednesday was smaller than the HK$7.56 billion loss recorded in the first six months of 2021.

The city’s flag carrier was among businesses hard hit by tough coronavirus control measures, especially for most of the first six months of the year when the fifth Covid-19 wave ran rampant.

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The rebound was attributed to strong passenger flight business increasing by 178.9 per cent to HK$2.08 billion in the first half of 2022, compared with the same period last year.

Cathay also reported a 17 per cent increase in revenue to HK$18.55 billion, compared with HK$15.85 billion the same period last year, while costs decreased slightly.

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Cargo flights continued to be the airline’s breadwinner, generating HK$13.8 billion in revenue in the first half of the year, an 8.9 per cent jump year on year.

The airline carried an average of 1,853 passengers per day, up 113.4 per cent, compared to the same period last year. The cargo load factor - an indicator on capacity filled - was 75.8 per cent compared with 81.4 per cent previously.

The company attributed the strong revenue to an increase in cargo planes travelling to the Americas and Europe, with such flights operating at more than half of pre-pandemic cargo capacity levels in June.

The airline said its cargo performance was still similarly affected by restrictions and quarantine requirements for Hong Kong-based aircrew

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Cathay had earlier said it planned to increase the figure to 65 per cent of its pre-pandemic cargo flight capacity by the end of this year.

The airline also said it would add more flights to its schedule and plans to double its flight destinations from 29 at the start of 2022 to 60 by the end of the year. Before the pandemic, Cathay operated routes to 108 locations.

Operating at about 11 per cent of its pre-pandemic passenger capacity in June, Cathay said it expected the figure to reach around a quarter of the previous level by the end of the year.

In comparison, Singapore Airlines flew at 64 per cent of its pre-pandemic capacity in June, with the company aiming to reach about 81 per cent by December.

With no domestic travel market, Cathay and Singapore Airlines are wholly reliant on international travel and open borders.

In response to the gradual easing of anti-epidemic measures in Hong Kong, Cathay announced in late July that it would bring back passenger planes parked in the desert surrounding the town of Alice Springs in Australia, where one-third of its fleet was previously sitting idle.

The airline on Monday also urged Hong Kong’s government to produce a clear roadmap for the phasing out of all anti-epidemic travel restrictions to protect the city’s status as an aviation hub.

The move followed the decision by authorities to reduce the hotel quarantine from 7 days to three from Friday, with inbound arrivals allowed to spend the remaining four days at home or in other accommodation with limited freedom of movement.

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Last year, Cathay carried out a range of permanent and temporary staffing cuts to reduce costs, reducing the size of its workforce by 37 per cent between 2019 and the end of 2021.

The airline employed more than 21,600 people worldwide, including about 17,700 in Hong Kong, as of last December

The Cathay Pacific Group had HK$30.3 billion in liquidity at the end of 2021, compared to HK$28.6 billion at the end of 2020. It was also aiming to reduce operating cash burn to less than HK$500 million per month for the next few months.

The government initiated a bailout of the airline in 2020, providing a cash injection of HK$39 billion over the course of the pandemic in exchange for a 6.5 per cent stake in the company.

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