Cathay looks to rebuild after ‘brutal’ pandemic losses

Anne Marie Roantree, Donny Kwok

HONG KONG, (Reuters) –Cathay Pacific Airways Ltd has declared that it is prepared to rebuild Hong Kong’s status as a hub after the pandemic. The statement was made by the chief executive of the carrier on Wednesday. It reported a loss in 2022 at the bottom end of its forecast range.

Cathay shares rose by 1.4%, to HK$7.95 immediately after the results were published. Investors bet on a turnaround in the wake of heavy losses from the pandemic. The stock fell 0.3% compared with a 2.4% decline for the Hang Seng Index.

“We were very encouraged to see a bright light at the end of the tunnel in the second half of 2022, and the positive momentum has continued into 2023,” Ronald Lam was the Chief Executive Officer.

“After three brutal years of the COVID-19 pandemic, we have finally entered into a new exciting phase, in which we will rebuild Cathay Pacific for Hong Kong.”

For the twelve months ending Dec. 31, the airline posted an annual loss in excess of HK$6.55 trillion ($834.4 Million). This is higher than its previous loss, but still within the range of the January forecast of a loss between HK$6.4 billion to HK$7.4 billion.

According to data from Refinitiv, analysts had predicted a loss of HK$4.4 trillion annually. After the lifting of border restrictions between Hong Kong and mainland China, they forecast a profit of HK$3.9billion for 2012.

Hong Kong’s leading carrier claimed that the recruitment drive it announced in October, to increase its staff by 4,000 over the next 18-24 month was proceeding as planned. There were sufficient cabin crew members and pilots available to help support this demand.

According to the company, it hopes passenger and cargo volumes will return to pre-pandemic levels by 2024.

Cathay had placed a lot of its aircraft in desert areas during the pandemic because of a lackluster demand. This year, Cathay’s recovery is slower than Singapore Airlines Ltd. which was subject to more stringent rules.  

COVID flight cancellations, closing of borders and quarantine restrictions for crew severely affected the airline, leading to drastic reductions in headcount.

Cathay claimed it had approximately one-third pre-pandemic capacity for passenger flights by December. It ended the year with passenger flights to 58 destinations. This is twice the number of destinations Cathay flew to in January 2022.

By 2023, it would have approximately 70% of the pre-pandemic passenger capacity. The goal was to eventually return to prepandemic levels in 2024. By the end 2022, it was operating at about two-thirds its pre-pandemic cargo flight capacities.

($1=7.8498 Hong Kong dollars)

(Reporting by Anne Marie Roantree. Donny Kwaok. Twinnie Siu. Editing by Jamie Freed. Stephen Coates. Muralikumar. Anantharaman.