Disastrous results follow a disastrous year for Cathay Pacific Group
Cathay Pacific Group chairman, Patrick Healy, said today the short-term outlook for the company in 2021 continued to be challenging after the Hong Kong-based airline group reported a net loss of HK$21.6 billion (US$2.8 billion) for calendar 2020. Read More » The airline and airline services company collapsed into the red from a net profit of HK$1.7 billion in the same months in 2019. Revenue declined 56.1%, to HK$46.9 billion, the group said in its regulatory filing to the Stock Exchange of Hong Kong. Its cargo arm saved the company from even worse results, analysts commented.
"Market conditions remain challenging and dynamic," Healy said. “It is by no means clear how the pandemic and its impact will develop over the coming months.”
Healy reaffirmed previous forecasts that passenger flight capacity would be "well below a quarter of pre-pandemic" levels in the first half of 2021 and less than 50% overall for the full year.
“The correlation between the roll-out of vaccination programmes in our key markets and the potential future relaxation of travel restrictions remains highly uncertain and difficult to predict," Healy said. "We will remain agile and will respond according to the situation as it develops."
The result included HK$2.8 billion in impairment charges that covered 34 aircraft unlikely to re-enter meaningful economic service before being retired or returned to lessors, the company said. Total passengers tumbled 86.9%, to 4.6 million. The group had a war chest of HK$28.6 billion at December 31, 2020.
Cathay said it’s LCC, HK Express, recorded a net loss of HK$1.7 billion for the year. Its base case scenario is it will make a "faster recovery than Cathay Pacific because of faster pick-up in short-haul and regional leisure travel and steady growth in the LCC demand model," a group statement said.