Hong Kong’s Cathay Pacific Airways has posted a record annual loss of HK$21.65 billion (U.S.$2.79 billion) in 2020.
The loss, caused by a travel downturn, restructuring costs and fleet writedowns, has the carrier now focused on preserving cash. The carrier had posted a profit of HK$1.69 billion in 2019. The 2020 loss was worse than an average forecast for a net loss of HK$19.9 billion by 13 analysts.
“The pace of the recovery remains uncertain and the group is still very much in survival mode,” Cathay Chairman Patrick Healy told reporters on Wednesday. “Managing cash prudently remains a priority.”
Cathay lacks a domestic market at a time when international borders are largely closed because of the coronavirus pandemic. In December, the carrier’s passenger numbers fell by 98.7% compared with a year earlier, though cargo carriage was down by a smaller 32.3%.
Nearly 60% of its 2020 revenue of HK$47.9 billion was from its cargo operations, up from about 20% in 2019.
The airline said in January it would cut passenger capacity by 60% and cargo capacity by 25% as a result of new rules that required crew to quarantine for two weeks in hotels before returning to normal life in Hong Kong that took effect on Feb. 20. As a result, Cathay has put most crew on voluntary rosters of three weeks flying, two weeks in a hotel and two weeks off at home.
Cathay said the quarantine rules would increase cash burn by about HK$300 million to HK$400 million per month, on top of earlier HK$1 billion to HK$1.5 billion levels.
“There is as yet no indication how long these measures remain in place,” Healy said.
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