Friday, 17 July 2020

Hong Kong based carrier Cathay Pacific expecting losses of $1.3 billion

The Hong Kong based Cathay Pacific Airways is expecting massive losses for the first half of the year, the carrier warned on Friday.

Estimates of HK$9.9 billion  / US$1.3 billion losses are reported by the airline as it battles the downturn in business caused by both the coronavirus COVID-19 pandemic and the democracy upheaval and protests in Hong Kong.

The HK$9.9 billion loss is a striking contrast to the net profit of HK$1.3 billion for the same period in 2019. This includes impairment charges amounting to approximately HK$2.4 billion, which mainly relate to 16 aircraft that are unlikely to re-enter meaningful economic service again before the 2021 summer season together with certain airline service subsidiaries assets.

Cathay Pacific Group Chief Customer and Commercial Officer Ronald Lam said: “The landscape of international aviation remains incredibly uncertain with border restrictions and quarantine measures still in place across the globe. Although we have begun to see some initial developments, notably a slight increase in the number of transit passengers following the easing of transit restrictions through Hong Kong International Airport, we are still yet to see any significant signs of immediate improvement.”


The carrier and its subsidiary Cathay Dragon has a dismal June, with just 27,106 passengers travelling with them, a decrease of 99.1% from June 2019's figures. Subsequently, revenue passenger kilometres (RPKs) fell 98.8% year-on-year and the load factor dropped by 59.3 percentage points to 27.3%. In the first six months of 2020, the number of passengers carried dropped by 76% when compared to the same half-year period for 2019.


Unlike many airlines elsewhere in the world, cargo for both Cathay Pacific and Cathay Dragon also dropped.  The two airlines carried 93,228 tonnes of cargo and mail last month, a decrease of 43.1% compared to June 2019. The month’s revenue freight tonne-kilometres (RFTKs) fell 35.8% year-on-year. The cargo and mail load factor increased by 11.7 percentage points to 74.5%. 

"Demand continued to be very weak in June with our airlines carrying less than 1% of the passengers we carried in the same month in 2019." Ronald Lam said of the airlines June 2020 performance,  adding, "We operated about 4% of our normal passenger flight capacity in June. This was slightly more than we operated in May, having resumed services to some destinations such as New York, San Francisco, Amsterdam and Melbourne in late June. Load factor remained low at 27.3%, and on average we carried approximately 900 passengers a day only." 

Looking to the future, Lam said: "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. What will not change is our resolute commitment to safety, to serving our customers and our dedication to contributing to the success of the Hong Kong international aviation hub. We remain absolutely confident in the long-term prospects of both the Cathay Pacific Group and our home hub."




CATHAY PACIFIC /

CATHAY DRAGON COMBINED TRAFFIC

JUN
% Change
Cumulative
%
Change

2020
VS JUN 2019

JUN 2020
YTD

RPK (000)




 - Chinese mainland
3,350
-99.5%
757,639
-83.4%
 - North East Asia
5,791
-99.6%
2,007,121
-76.1%
 - South East Asia
17,796
-98.8%
2,308,206
-74.1%
- South Asia, Middle East  & Africa
-
-100.0%
1,449,874
-72.6%
 - South West Pacific
21,713
-98.2%
3,102,322
-61.3%
 - North America
71,010
-97.9%
5,276,304
-71.4%
 - Europe
26,053
-99.1%
3,766,593
-74.0%
RPK Total (000)
145,713
-98.8%
18,668,059
-72.6%
Passengers carried
27,106
-99.1%
4,389,092
-76.0%
Cargo and mail revenue tonne km (000)
596,037
-35.8%
4,129,114
-24.6%
Cargo and mail carried (000kg)
93,228
-43.1%
666,525
-31.9%
Number of flights
1,110
-83.7%
15,713
-61.7%

CATHAY PACIFIC /

CATHAY DRAGON COMBINED CAPACITY

JUN
% Change
Cumulative
%
Change

2020
VS JUN 2019

JUN 2020
YTD

ASK (000)




 - Chinese mainland
22,811
-97.6%
1,244,583
-78.7%
 - North East Asia
26,101
-98.4%
2,970,028
-71.1%
 - South East Asia
74,624
-95.9%
3,667,936
-65.7%
- South Asia, Middle East  & Africa
-
-100.0%
2,278,996
-64.1%
 - South West Pacific
67,500
-95.2%
4,385,990
-53.3%
 - North America
234,994
-93.7%
7,639,514
-64.5%
 - Europe
107,117
-96.5%
5,544,914
-66.9%
ASK Total (000)
533,147
-96.1%
27,731,961
-65.7%
Passenger load factor
27.3%
-59.3pt
67.3%
-16.9pt
Available cargo/mail tonne km (000)
799,987
-45.9%
5,958,145
-31.0%
Cargo and mail load factor
74.5%
11.7pt
69.3%
5.9pt
ATK (000)
850,713
-69.4%
8,594,749
-47.3%





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