HONG KONG (AFP) – Hong Kong carrier Cathay Pacific issued a profit warning yesterday, estimating it will suffer a historic loss of HKD9.9 billion (USD1.3 billion) in the first half of 2020 as it reels from the coronavirus pandemic.
“The Group will record a net loss attributable to shareholders of approximately HKD9.9 billion, which compares to a net profit to shareholders of HKD1.3 billion for the same period in 2019,” the airline said in a statement.
Like airlines worldwide, Cathay has been battered by the evaporation of global travel during the pandemic. But the carrier is especially vulnerable because it has no domestic market to fall back on.
In a stark illustration of the travel collapse, Cathay said June passenger numbers were down 99.1 per cent year on year.
“The landscape of international aviation remains incredibly uncertain with border restrictions and quarantine measures still in place across the globe,” Chief Customer and Commercial Officer Ronald Lam said in the statement.
He added there was a slight increase in the number of transit passengers following the easing of restrictions at Hong Kong’s airport but they are “yet to see any significant signs of immediate improvement”.
The airline also said 16 aircraft are “unlikely” to operate until summer in 2021, causing impairment charges amounting to around HKD2.4 billion.
On the cargo front, the carrier said there were fewer cargo-only passenger flights compared with May. Its cargo tonnage fell five per cent month-on-month as demand for medical supplies waned following a peak month in May.
Hong Kong’s government came to the rescue of Cathay earlier this year with a HKD39-billion (USD5 billion) recapitalisation plan.