Cathay Pacific has issued a profit warning, painting a bleak interim future for the airline. Throughout the first half of 2020, Cathay has incurred a net loss of HK $9.9 billion ($1.28 billion) – representing an 87% increase in net losses, compared to H1 2019.
Adding to the uncertainty for shareholders, the Hong Kong flag-carrier and its regional subsidiary have revealed that, during June, passenger figures dropped 99.1% when compared year-on-year. For cargo, the story is not as bleak, both airlines carried 56.9% of what was carried in June 2019.
Speaking about Cathay’s outlook, Chief Customer Officer Ronald Lam said the airline will be cautious in its approach to future operations.
“While some markets are starting to relax border restrictions and quarantine requirements in July, we remain cautious and agile in our approach to resuming our passenger flight services. The one certainty facing the global aviation industry is that the landscape will be significantly changed when international air travel recovers. The Group is moving decisively to best position the business to be competitive and to secure its financial health over the long term in a new normal.”
Ronald Lam, Cathay Pacific Group Chief Customer and Commercial Officer
Cathay Pacific and Cathay Dragon also told SamChui.com that both airlines will operate at a combined 7% capacity throughout July. Additionally, they are gearing up for 10% capacity by August and potentially more significant increases in later months.
The Hong Kong Government has appointed two observers as part of a bailout package, in which 6% of the airline will belong to the HKSAR. The move comes as part of the flag carrier’s HK$39 billion ($5.03 billion) recapitalisation process.