Hong Kong’s Cathay Pacific to offer 50,000 discounted return tickets, reveals nearly HK$293 million in dividends paid to government
- Tickets cover 34 destinations, including Kaohsiung, Tokyo, Seoul, London, Sydney and Chicago, for travel between January and June next year
- Airline also reveals it has paid government HK$292.5 million in dividends owed on HK$19.5 billion in preference shares
The discounted tickets would cover 34 destinations, including Kaohsiung in Taiwan, Tokyo, Seoul, London, Sydney and Chicago, for travel between January and June next year, the airline said. They would be available from 2pm on Thursday until August 30.
When asked why the discounted ticket were being offered, a spokesman said the airline launched promotions from time to time as it continued to ramp up services.
The airline also revealed on Wednesday it paid the government HK$292.5 million in dividends owed on HK$19.5 billion in preference shares on Monday, its second such payment following the HK$1.5 billion disbursed at the end of June, which brought its payments up to date.
The government acquired the preference shares – equity with restricted voting rights – as part of a HK$39 billion recapitalisation package agreed in 2020, as the airline struggled to stay afloat while the global travel market collapsed.
The company also pledged it would buy back half of the preference shares issued to the government by the end of this year. The remainder would be acquired by the end of July 2024, subject to completion of a proposed capital reduction and business conditions at the time, it said.
Along with its budget arm HK Express, the Cathay Group carried more than 2 million passengers in a single month for the first time since the pandemic erupted at the start of 2020, it added.
“July marks the beginning of the traditional summer peak for passenger travel, and we are very pleased to see that demand has been strong,” Cathay chief customer and commercial officer Lavinia Lau Hoi-zee said. “With the start of the school holidays in mid-July, there was a substantial increase in demand for popular short-haul destinations around Asia.”
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The airline carried 1.74 million passengers last month, compared with 219,746 in the same period last year, a nearly 700 per cent increase. The latest passenger load factor – a measure of how well an airline was filling available seats – was 89 per cent.
Lau said the two carriers were “now close” to 60 per cent of pre-pandemic passenger flight capacity levels. The group aims to raise that figure to 70 per cent by the end of the year and fully restore levels by the end of 2024.
Regional rival Singapore Airlines Group, meanwhile, said it was on track to reach about 90 per cent of pre-pandemic capacity by March next year.
The carrier last week said it was increasing the frequency of flights to key markets from March to October next year, restoring more of its services to pre-pandemic levels.
From next August, Singapore Airlines will have six daily flights to Hong Kong, up from four currently.
Cathay expected strong demand would continue through the rest of the month, and it had added back capacity for routes to North America, Europe, Japan and Southeast Asia, she said.
On the cargo side, Lau said volume was expected to remain flat for the remainder of the summer, but pick up from the end of the third quarter, the traditional peak period.
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As part of the recapitalisation package, Cathay agreed to pay dividends to the government every six months with a gradually increasing interest rate until all the preference shares were redeemed.
The dividend interest rate was 3 per cent for the first three years, 5 per cent from this August and will rise to 7 per cent in 12 months.
Economist Simon Lee Siu-po, an honorary fellow at the Asia-Pacific Institute of Business at Chinese University, said the preference shares had a progressive dividend interest rate to encourage Cathay to redeem them at the earliest possible time.
“For headwinds, as more and more flights are resuming, air ticket prices will drop and the yield decreases. Operating costs are increasing too,” Lee added.
The approval of 2,841 applications accounted for about 45 per cent of the quota of 6,300 imported workers allocated to the aviation sector. More than half of these were passenger service officers, ramp services agents and aircraft mechanics or technicians.
