Cathay Pacific posts record $3.75b loss for pandemic-hit 2020
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Cathay Pacific says it's focused on preserving cash after posting a record loss of US$2.8 billion (S$3.75 billion).
HONG KONG • Cathay Pacific Airways said yesterday it is focused on preserving cash after it posted a record annual loss of HK$21.65 billion (S$3.75 billion), caused by the Covid-19 travel downturn, restructuring costs and fleet write-downs.
The 2020 loss compares with 2019's HK$1.69 billion profit and an average forecast for a net loss of HK$19.9 billion by 13 analysts, according to Refinitiv.
"Market conditions remain challenging and dynamic," said Cathay chairman Patrick Healy. "All our cash preservation measures will continue unabated. Executive pay cuts will remain in place throughout 2021."
Cathay lacks a domestic market at a time when international borders are largely closed because of the coronavirus pandemic. In December, its passenger numbers fell by 98.7 per cent compared with a year earlier, though cargo carriage was down by a smaller 32.3 per cent.
Nearly 60 per cent of its 2020 revenue of HK$47.9 billion was from its cargo operations, up from around 20 per cent in 2019.
The airline said in January it would cut passenger capacity by 60 per cent and cargo capacity by 25 per cent as a result of new rules from Feb 20 that require crew to quarantine for two weeks in hotels before returning to normal life in Hong Kong.
Cathay has thus put most crew on voluntary rosters of three weeks flying, two weeks in a hotel and two weeks off at home.
The quarantine rules would increase cash burn by HK$300 million to HK$400 million a month, on top of earlier HK$1 billion to HK$1.5 billion levels, it said.
The airline in January issued HK$6.74 billion of convertible bonds to shore up liquidity.
Cathay last October said it would cut 5,900 jobs to help it weather the pandemic, including nearly all of the positions at its regional airline Cathay Dragon, which it shut down.
Bocom International analyst Luya You said the prospect of further job cuts is rising, as a slower-than-expected vaccine roll-out in key markets dimmed the outlook for the second half of this year.
REUTERS
