Sun, 09-Aug-2020
Friday 17 Jul 2020 , 3:23 pm

Cathay Pacific Flags $1.3 Billion First-half Loss as Travel Demand Battered

The estimated first-half loss would be Cathay’s biggest half-yearly loss in at least a decade and compares to a HK$1.35 billion profit in the first half of 2019, before widespread anti-government protests and the virus decimated demand.
By SIN Bureau
Share at:

Hong Kong’s Cathay Pacific Airways Ltd. expects a first-half net loss of HK$9.9 billion (£1.03 billion), including impairment charges on 16 planes, the airline said on Friday, as the coronavirus pandemic crushed travel demand.

Earlier, the airline had flagged a “substantial” first-half loss and that it had burned through cash of HK$2.5 billion to HK$3 billion each month since February.

The estimated first-half loss would be Cathay’s biggest half-yearly loss in at least a decade and compares to a HK$1.35 billion profit in the first half of 2019, before widespread anti-government protests and the virus decimated demand.

“The landscape of international aviation remains incredibly uncertain with border restrictions and quarantine measures still in place across the globe,” Cathay Chief Customer and Commercial Officer Ronald Lam said in a statement.

The airline, which last month received a $5 billion rescue package led by the Hong Kong government, said it planned to operate 7% of normal passenger capacity in July, rising to around 10% in August.

It will take a HK$2.4 billion impairment charge alongside its half-year results that mainly relates to 16 planes that are unlikely to re-enter meaningful service before the 2021 summer season, the company said.

Before the Friday announcement, Cathay was expected to post a HK$12.6 billion full-year loss in 2020, according to the average forecast of 13 analysts polled by Refinitiv.

The airline said it would make tough decisions by the fourth quarter after reviewing all aspects of its business model, including aircraft orders.

It has accepted government employment subsidies that prevent it from cutting Hong Kong-based staff through August.

Cathay said this month it was evaluating whether to send some of its aircraft to less humid locations for storage as it reviews the size of its fleet in light of the fall in demand.

The airline is due to release its first-half results on Aug. 12.

Read Here




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

Smart News, Updates and Insights Drive Smarter Decisions

Smart Industry News is a one stop shop of industry news across the globe. We have a team of experts who provides latest updates on industry news to our readers daily. The news available on our website is general information and does not provide our customers with any legal or professional advice specific to any industry...

sales@smartindustrynews.com
media@smartindustrynews.com

Subscribe to our newsletter
Get the latest in your inbox weekly Sign up for the fully charged newsletter
Follow Us:
© The News and Media Division of The Insight Partners 2019 | All Rights Reserved