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Cathay Pacific’s loss of HKD7.57 billion in the first half of 2021 is lower than its loss of HKD9.87 billion in the same period a year ago
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Cargo revenues were strong, sustained by cargo yield increases of 24.4% and record load factors of 81.4%
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Passenger revenue decreased by 92.8%, severely affected by COVID-19-related travel restrictions and quarantine requirements
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Cargo operations are expected to continue to perform strongly in the second half of the year
Hong Kong flag carrier Cathay Pacific announced a lower loss of HKD7.57 billion (US$973 million) in the first half of 2021 from its HKD9.87 billion loss in the same period last year, largely on the back of strong cargo demand and a drastic workforce cut.
The loss for January to June 2021 includes impairment and related charges of HKD500 million mainly relating to 11 aircraft that are unlikely to reenter meaningful economic service before they retire or are returned to lessors and HKD403 million restructuring costs.
Loss after tax was HKD5.03 billion in the first half of 2021 from a loss of HKD7.36 billion year-on-year, and the share of losses from subsidiaries and associates was HKD2.53 billion from a loss of HKD2.50 billion a year ago.
“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 our history. The emergence of new virus variants led to the tightening of travel restrictions and quarantine requirements in Hong Kong and several of our key markets,” said group chairman Patrick Healy in an August 11 statement.
Cargo revenues were HKD11.11 billion, a decrease of 0.6% compared to the first half of 2020. Revenues were strong considering the circumstances, sustained by cargo yield increases of 24.4% and record load factors of 81.4%, up from 69.3% a year ago.
Cargo performance was limited by capacity restrictions resulting from crew quarantine requirements and lower cargo capacity as a result of fewer passenger aircraft being flown. Available cargo tonne kilometers decreased by 31.9%. Total tonnage decreased by 17.7% to 549,000 tonnes.
Passenger revenue decreased by 92.8% to HKD745 million in the first half of 2021 compared with the first half of 2020, severely affected by COVID-19-related travel restrictions and quarantine requirements. Revenue passenger kilometers decreased by 95.8%, while passenger capacity decreased by 85.0%.
The airline 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.
The company said it focused on prudent cost management and has continued cash preservation measures introduced in 2020. Non-fuel costs decreased by 33.5%, while executive pay is being cut for the whole 2021. A third unpaid leave scheme was also introduced, with an 80% voluntary uptake. A range of employee furlough, leave without pay, voluntary separation and early retirement schemes were implemented globally for a broad range of employee groups.
Looking ahead, Healy said that COVID-19 will continue to have a severe impact on the airline’s business until borders progressively open and travel constraints are lifted.
“We hope to operate up to 30% of our pre-pandemic passenger capacity by the fourth quarter of 2021, but this is dependent on operational and passenger travel restrictions being lifted,” he added.
The company said it expects its cargo operations to continue to perform strongly in the second half of the year, adding it will try to reduce cash burn to less than HKD1.0 billion per month for the remainder of the year.
