Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Cathay Pacific CEO blames virus for historic loss

Cathay Pacific CEO blames virus for historic loss

Cathay Pacific Airways has said it expects to make a loss of HK$9.9 billion (40.5 billion baht) in the first six months of 2020, the largest in its history. Airline calls third wave ‘cause for concern’.
Augustus Tang Kin-wing, the airline’s CEO, blamed the profit warning on the coronavirus pandemic, and staff were told in a memo that its restructuring review, which could impact jobs, would “balance stakeholder interests”, giving an extra clue to the factors likely to determine the company’s future size and shape.

The Hong Kong government appointed two observers to the Cathay Pacific board this week to oversee its HK$27.3 billion rescue package of the city’s flag carrier, which won shareholder approval on Monday.

“The result underlines the extent of the damage being inflicted on our operations since Covid-19 started spreading across our markets, decimating the demand for air travel as customers were unable or unwilling to fly,” Tang said, adding the third wave of cases in the city was a “cause for concern”.

Cathay swung to the biggest loss in the company’s reporting of a six-month or full-year period from a HK$1.3 billion net profit in the same time last year. Its previous biggest loss was in 2008 at the height of the global financial crisis, when it lost HK$8.6 billion.

The company said 16 Cathay Pacific and Cathay Dragon planes would not re-enter service before the summer of 2021, causing an estimated HK$2.4 billion impairment charge, which includes “certain airline service subsidiaries assets”.

It is the first time the airline has given an estimate of how many fewer aircraft it would require to operate its optimal post-pandemic schedule, giving a better indication of company size and how many staff it would ultimately need.

Ronald Lam Siu-por, the airline’s chief customer and commercial officer, said: “The one certainty facing the global aviation industry is that the landscape will be significantly changed when international air travel recovers.”

The government led the HK$39 billion rescue of Cathay, citing risks to the wider economy, as the airline warned it was close to collapse without financial help.

Carlson Tong Ka-shing, the former securities watchdog chairman, and Rimsky Yuen Kwok-keung, the ex-justice minister, have been named to oversee the investment.

The airline has been losing up to HK$3 billion a month since February. Tang said Cathay would build financial forecasts and judge market trends on top of factoring stakeholder interests when it presented its restructuring proposals to the board later this year.

Cathay pocketed HK$680 million from the government’s employment subsidy scheme on Tuesday.

Lam said the airline remained “cautious and agile” to resuming flight services.

In June, the airline continued to carry less than 1% of its normal passenger volume, handling 900 customers a day on average, a far cry from the 100,000 on average. It operated less than 4% of its normal schedule.

But it is on course to operate double-digit capacity, or 10% in August, the first time in five months. In April and May the carrier operated 3% of its normal schedule.

However, for the second month in a row, the airline scaled back its planned capacity and in July it has offered 7% of a normal schedule, against 9.4 % originally, highlighting the reality of decreased demand.

After a ban on passengers transiting through Hong Kong International Airport was eased partially, the airline said it saw a “gradual pickup” but connecting passengers pay less than travellers starting or ending journeys in Hong Kong.

Cathay Pacific’s cargo performance, more recently a strong part of the business, carried 43% less cargo as the air freight business weakened after initial demand for medical supplies eased off.

The airline is expected to unveil its half-year 2020 results on Aug 12.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

Intel Reports Revenue Beats but Sees 81% Rise in Losses
0:00
0:00
Open
Intel Reports Revenue Beats but Sees 81% Rise in Losses
0:00
0:00
Close
Intel Reports Revenue Beats but Sees 81% Rise in Losses
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
CEO Resigns Amid Controversy Over Relationship with HR Executive
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
Tulsi Gabbard Unveils Evidence Alleging Political Manipulation of Intelligence During Trump Administration
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Trump Announces Coca-Cola to Shift to Cane Sugar in U.S. Production
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Air India Pilot’s Mental Health Records Under Scrutiny
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
Moonshot AI Unveils Kimi K2: A New Open-Source AI Model
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
EU Delays Retaliatory Tariffs Amid New U.S. Threats on Imports
Trump Proposes Supplying Arms to Ukraine Through NATO Allies
US Opens First Rare Earth Mine in Over 70 Years in Wyoming
Bitcoin Reaches New Milestone of $116,000
Severe Heatwave Claims 2,300 Lives Across Europe
Declining Beer Consumption Signals Cultural Shift in Germany
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
×