by JORDAN CHONG  

December 1st 2020

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JUNE

Cathay Pacific Group chairman, Patrick Healy, described the airline group’s capital raising as the “only plan available” to avoid a collapse of the airline company. Read More »

The HK$39 billion (US$5 billion) capital raising included the Hong Kong Special Administrative Region government taking 6.08% in equity in the airline and receiving two non-voting “observer” positions on the board.

In addition to the capital raising, Healy foreshadowed some “tough decisions” would be made before the end of the year, following a review of the business, to determine the appropriate scale, shape and size of the company in a post-COVID-19 environment.

Qantas Group said it would make 6,000 staff – about 20% of its workforce – redundant, keep grounded 100 aircraft for up to 12 months and retire its remaining 747-400/400ERs immediately. CEO Alan Joyce expected revenue would be much lower for several years and that meant becoming a smaller airline for now.

One of the ways Qantas was to become a smaller airline was by reducing the footprint of its LCC, Jetstar, in Asia. It announced it would terminate its 13-year investment in Vietnam-based Jetstar Pacific by offloading its 30% holding in the LCC, leaving it with two Asia-based franchises – Japan and Singapore.

Another airline succumbed to COVID-19 this month, with Thailand-headquartered LCC, NokScoot, shutting down some six years after its establishment as a joint venture between Singapore-based Scoot and Thailand’s Nok Air. It did not see a path to recovery and sustainable growth, given the unprecedented challenges of the pandemic. Some 425 staff lost their jobs.

Amid all the gloomy news, there were a few causes for celebration. Japan’s ZIPAir Tokyo commenced commercial operations after the inaugural flight from Tokyo Narita to Bangkok was postponed from May 14. There was little fanfare associated with the flight. The wholly-owned subsidiary of Japan Airlines operated the June 3 flight as a cargo-only service due to COVID-19.

In other encouraging developments, Taiwan’s Central Epidemic Command Centre (CECC) said business travellers from 15 countries would be eligible for reduced quarantine periods when travelling to the country. Singapore and China established a “fast lane” arrangement for short-term essential business or official travel between Singapore and six destinations in China and Hong Kong International Airport (HKIA) reopened for transit passengers. In Australia, Bain Capital was announced as the preferred VA buyer.