hit counter

Cathay Pacific mitigates loss but COVID rules crew’s cloud prospects

A Cathay Pacific plane takes off at the airport amid the coronavirus disease (COVID-19) pandemic in Hong Kong, China March 31, 2022. REUTERS/Tyrone Siu/

Sign up now for FREE unlimited access to Reuters.com

HONG KONG, Aug 10 (Reuters) – Cathay Pacific Airways Ltd (0293.HK) said Hong Kong’s strict COVID rules for flight crews were hampering the airline’s ability to capitalize on rising travel demand, even as the first-half loss narrowed to HK-5 Dollars decreased billions ($636.98 million).

The airline falls behind traditional rivals Singapore Airlines Ltd (SIA) (SIAL.SI) in restoring international capacity as roster preparations are hampered by a quarantine requirement for Hong Kong-based crew of passenger planes, who will stay in Hong Kong for three nights after returning Hotels must spend every trip.

The financial hub is also one of the few places in the world, along with mainland China and Taiwan, that still requires COVID-19 quarantine for incoming passengers, though such hotel stays are set to be cut from seven days to three, officials said this week. Continue reading

Sign up now for FREE unlimited access to Reuters.com

Cathay’s revenue rose 17% to HK$18.6 billion in the first half, driven by an increase in ticket sales and continued strong demand for air cargo, despite passenger numbers in June falling 95.2% from pre-H1 levels pandemic remained.

The loss was lower than the HK$7.57 billion reported a year earlier, with cash flow turning positive towards the end of the period and financial results expected to improve in the second half.

“We expect both pent-up passenger demand and the freight spike season to drive a return to profitability in the second half,” Jefferies analyst Andrew Lee said in a statement.

Shares of the company rose as much as 3.3% after the results to their highest since June 2020, before shedding some gains and gaining 1%.

Cathay reiterated on Wednesday that it expects passenger capacity to approach a quarter of pre-pandemic levels by the end of the year, up from 11% in June.

Chairman Patrick Healy said the airline’s huge backlog of crew retraining requirements, many of whom had not flown in more than a year, could not be resolved until quarantine rules were lifted.

“Combined with other operational complexities, this means that capacity can only be increased incrementally over a period of several months after all COVID-related operational restrictions are lifted,” he told reporters.

In Singapore, which has scrapped mandatory quarantine, SIA said last month that it had net income of S$370 million ($268.49 million) in the June quarter when it was operating at 61% of pre-pandemic capacity . SIA expects that figure to rise to 81% by the end of December. Continue reading

As curbs ease, Cathay is preparing to pull more planes out of storage to restore Hong Kong’s status as an air hub, though the speed depends in part on the easing of crew quarantine rules, operations manager Greg Hughes said. Continue reading

The airline reiterated its goal to hire more than 4,000 people over the next 18 to 24 months to meet operational needs as travel recovers, after shedding more than 6,000 jobs during the pandemic.

Pilot turnover was also higher than normal due to onerous quarantine requirements combined with permanent pay cuts of up to 58%. Continue reading

Cathay is expected to report a full-year loss of HK$4.5 billion, according to estimates from an average of 11 analysts compiled by Refinitiv.

($1=1.3781 Singapore dollars)

($1=7.8495 Hong Kong dollars)

Sign up now for FREE unlimited access to Reuters.com

Reporting by Jamie Freed in Sydney and Farah Master in Hong Kong; additional reporting by Donny Kwok in Hong Kong; Edited by Gerry Doyle and Clarence Fernandez

Our standards: The Thomson Reuters Trust Principles.

Leave a Comment