Dhaka: Hong Kong’s Cathay Pacific Airways Ltd announced on July 17 that it expects a first-half net loss of HKD 9.9 billion (USD 1.03 billion), including impairment charges on 16 planes, as the coronavirus pandemic crushed travel demand.
Earlier, the airline had flagged a “substantial” first-half loss and that it had burned through cash of HKD 2.5 billion to HKD 3 billion each month since February.
The estimated first-half loss would be Cathay’s biggest half-yearly loss in at least a decade and compares to a HKD 1.35 billion profit in the first half of 2019, before widespread anti-government protests and the virus decimated demand.
“The landscape of international aviation remains incredibly uncertain with border restrictions and quarantine measures still in place across the globe,” Ronald Lam, Chief Customer and Commercial Officer, Cathay, said in a statement.
The airline, which last month received a USD 5 billion rescue package led by the Hong Kong government, said it planned to operate 7 per cent of normal passenger capacity in July, rising to around 10 per cent in August.
It will take a HKD 2.4 billion impairment charge alongside its half-year results that mainly relates to 16 planes that are unlikely to re-enter meaningful service before the 2021 summer season, the company said.
Before the announcement on July 17, Cathay was expected to post a HKD 12.6 billion full-year loss in 2020, according to reports.
The airline said it would make tough decisions by the fourth quarter after reviewing all aspects of its business model, including aircraft orders.
It has accepted government employment subsidies that prevent it from cutting Hong Kong-based staff through August.
Cathay said this month it was evaluating whether to send some of its aircraft to less humid locations for storage as it reviews the size of its fleet in light of the fall in demand.