HONG KONG, 15 August 2021: The Cathay Group narrowed its attributable loss during the first half of the year to HKD7,565 million compared with the 2020 first-half loss of HKD9,865 million.
But the airline group’s chairman Patrick Healy warned Covid-19 continued to pose significant challenges for the Cathay Group in the first half of 2021, and this continues to be the toughest period in its history.
He cited the emergence of new virus variants led to the tightening of travel restrictions and quarantine requirements in Hong Kong and several of the airline group’s key markets.
Cathay Pacific’s loss after tax was HK$5,031 million in the first half of 2021 (2020 first-half loss HKD7,361 million), and the share of losses from subsidiaries and associates was HK$2,534 million (2020 first-half loss HK$2,504 million).
In February, the airline’s financial plight deepened when Hong Kong introduced strict quarantine requirements for aircrew, significantly reduced passenger and cargo schedules and increased the monthly cash burn.
Subsequent easing of some quarantine requirements for aircrew enabled the airline to reactivate cargo capacity and to gradually increase passenger capacity towards the end of the first half.
The loss for the first half of 2021 includes impairment and related charges of HKD500 million, mainly relating to 11 aircraft that are unlikely to re-enter meaningful economic service before they retire or are returned to lessors and HKD403 million restructuring costs.
“This compares to impairment and related charges for 16 aircraft (HKD1,242 million) and certain airline service subsidiaries’ assets (HKD1,223 million) in the first half of
2020,” the chairman reported. “Adjusting for these exceptional items, the Cathay Group’s attributable first-half loss was HKD6,662 million (2020 first half: loss of HK$7,400 million), and Cathay Pacific’s first-half loss was HKD,168 million (2020 first half: loss of HK$6,080 million).”
Cathay Pacific business performance
Passenger revenue decreased by 92.8% to HKD745 million in the first half of 2021 compared with the first half of 2020.
Revenue passenger kilometres (RPK) decreased by 95.8%. Passenger capacity decreased by 85.0%.
“We carried 157,000 passengers in the first half, an average of 868 passengers per day, 96.4% fewer than in the same period in 2020. The load factor was 18.9%, compared with 67.3% in the first half of 2020.”
COVID-19 will continue to have a severe impact on the airline’s group business until borders progressively open and travel constraints are lifted according to the chairman’s statement.
“As governments (including HKSAR) have stated, this is only going to be possible when sufficiently high vaccination levels are achieved. There are encouraging signs of recovery in some domestic aviation markets. However, travel restrictions and quarantine requirements continue to affect cross-border travel adversely. The progress of vaccination is encouraging, but the pace and timing of the recovery remain uncertain.”
According to Bloomberg, shares in Cathay rose 1.61% in afternoon trade, 11 August, following the release of the earnings report.