Fri, 02-Dec-2022
Wednesday 12 Aug 2020 , 11:27 am

Cathay Forecasts Weak Passenger Demand but Stronger Cargo After Record Loss

The airline on Wednesday reported a HK$9.87 billion ($1.27 billion) first-half loss, in line with a forecast it made last month, including HK$2.47 billion of impairment charges as passenger numbers plummeted.
By SIN Bureau
Share at:

Hong Kong’s Cathay Pacific Airways Ltd warned it did not expect a meaningful recovery in passenger demand for some time due to the coronavirus pandemic after posting a record first-half loss, but signalled a brighter cargo market outlook.

The airline on Wednesday reported a HK$9.87 billion ($1.27 billion) first-half loss, in line with a forecast it made last month, including HK$2.47 billion of impairment charges as passenger numbers plummeted.

Cathay expects passenger capacity to operate at around 7% of normal in August and September, down from an earlier forecast of up to 10% as travel restrictions continue, Chief Executive Augustus Tang said in a memo to staff that was seen by Reuters.

Revenue nearly halved to HK$27.7 billion in the six months ended June 30 as it slashed passenger flying to a barebones schedule due to lower demand and border restrictions, though it added more cargo-only flights as freight yields rose 44.1%.

Cathay Chief Customer and Commercial Officer Ronald Lam said the outlook for cargo heading into the peak Christmas season was positive.

“We are pretty confident on the demand side,” he told analysts in a webcast.

Cargo revenue topped passenger revenue and accounted for 46% of total sales in the first half, up from 21% a year earlier when the freight market was depressed.

“Nonetheless, cargo is no remedy for lost passengers — at most it’s like a band-aid on a knife wound. Better than nothing but won’t stop the bleeding,” BOCOM International analyst Luya You said.

Read More




Neha Mule

Neha writes articles on sectors including medicine, food, materials, and science & technology. A qualified statistician, she has the ability to observe and analyze the trends in global markets and write compelling articles that help CXOs in decision making. She is a bookworm and loves to read fiction, lifestyle, science and technology. Neha comes with 6 years of experience in content writing and editing that involves blog writing, preparation of study materials and OERs.

More from Neha Mule

Related News