Cathay's 2021 Losses Narrow To HK$5.5bn

Cathay Pacific on Wednesday reported an annual loss of HK$5.5 billion for 2021, thanks to what the airline called "exceptionally" strong cargo performance and cost control.

The losses were almost 75 percent less than the record deficit posted the year before.

The Hong Kong carrier's cargo revenue increased by about 32 percent last year, while passenger revenue dropped by more than 60 percent.

“The exceptionally strong cargo performance, together with our continued focus on effective cash and cost management, had a positive impact on our monthly operating cash burn, to the extent that we were marginally cash generative in the second half of 2021,” Cathay’s chairman Patrick Healy said in a statement.

By the end of last year, the airline’s available unrestricted liquidity balance was HK$30.3 billion, meaning it had enough money to operate for at least another 20 months.

Healy said the overall loss for the year was still “substantial”, adding that they were unable to add more flights because of continued operational and travel restrictions.

The company carried 717,000 passengers throughout 2021 – 84.5 percent fewer than in 2020.

Healy also said that the airline had an "extremely challenging" start to 2022, as the government further tightened quarantine requirements for Hong Kong-based aircrew and banned flights from nine countries, including its major markets the UK and US.

He said the measures had made it harder for Cathay to operate flights as planned, and it expects to run just around two percent of its pre-pandemic passenger flight capacity, while cargo flight capacity is likely to remain less than one-third of pre-Covid levels if the current restrictions stay in force.

“We are trying our best to maintain our passenger and cargo networks as far as possible and will try to increase our cargo capacity as much as practicable,” Healy said.

Speaking to reporters in an online press briefing, the Cathay chairman said the company will maintain its cost-controlling measures, even though there are no further plans to cut pay or lay off more staff.

He added that he remains confident in the future of the airline as well as Hong Kong as an international aviation hub.

“The future long-term outlook for Hong Kong as an international aviation hub and Cathay Pacific’s role at that hub remains fundamentally unchanged. Although I wouldn’t want to downplay the difficulties of operational challenges associated with the current situation, the fact remains that these are fundamentally short-term in nature and they don’t change our full confidence in the long term future of Hong Kong as a place to do business and Hong Kong as an international aviation hub,” he said.

Hong Kong's flag carrier added that it is in constant communication with the government over quarantine arrangements for aircrew.

Chief customer and commercial officer Ronald Lam said current restrictions for aircrew are making it extremely difficult for Cathay to operate more flights.

“We believe that on the cargo front, the demand will continue to be strong. On the passenger front, we believe once the travel restrictions are lifted there will be a lot of … demand. We are not too concerned about the demand side, but the biggest hurdle which affects our outlook for 2022 is actually on the supply side and mainly on the crew quarantine arrangement. If there’s any relaxation in the coming months, we will have a more positive outlook for the rest of 2022,” he said

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