Cathay Pacific and Cathay Dragon report combined HK$4.5 billion loss for start of 2020
- Cathay Pacific Group reveals unaudited loss in stock exchange filing
- Senior manager Ronald Lam calls financial outlook ‘very bleak’
Cathay Pacific Group’s two main airlines reported a combined HK$4.5 billion unaudited loss in the first four months of 2020, it said in a stock exchange filing on Friday.
Hong Kong’s flag carrier reported a 99.6 per cent drop in passengers carried in April – the steepest ever reduction recorded by the airline group – from the 3.12 million customers carried in the same month last year.
The airline’s financial performance include losses from fuel-hedging contracts that soured as the price of jet fuel and oil plummeted, while its payments for a certain volume of fuel at a fixed cost remained significantly higher than the market rate.
Lam said he saw no “immediate signs of improvement” as the airline expected to carry around 500 passengers per day in May. The airline is used to carrying 100,000 people a day.
“This is the biggest challenge to aviation we have ever witnessed,” Lam said. “We are evaluating all aspects of our business to ensure that we remain strong and competitive when we emerge from this crisis.
“The world has changed dramatically over the past few months and it is imperative that we do everything in our ability to adapt to this new world in order to secure our future within it.”
“Business and leisure travel will remain severely impacted for the foreseeable future,” Lam said. “Overall, we do not anticipate we will see a meaningful recovery for an extended period.”
Outbreak has battered air travel in Hong Kong and abroad – but worse is predicted
The International Air Transport Association (IATA) said airlines would suffer US$314 billion in lost ticket sales in 2020, with US$113 billion coming from the region’s airlines.
The airline suggested in the stock exchange filing it subscribed to the view that travel demand would not return for a few years. IATA on Wednesday said the air travel levels of 2019 would not return until 2023.
Cathay, the fifth-largest cargo airline in the world, has been supported by a surge in demand for air freight, which in turn has allowed it to charge higher prices for the service while launching cargo-only passenger flights.
The airline operated more than 500 cargo flights in April, double the number in March, offering some positive momentum. It carried 84,634 tonnes of cargo last month, down some 48 per cent from the preceding month because of the grounding of a major part of its cargo-carrying capacity.
Across the first four months of this year, the airline has carried almost two-thirds fewer passengers compared with the same period last year, due to a 50 per cent cut in available seat capacity and a 59 per cent slump in demand for travel.
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