Cathay Pacific to post narrower-than-expected 2021 annual loss

FILE PHOTO: A sign of Cathay Pacific is seen at its headquarters Cathay City in Hong Kong, China October 21, 2020. REUTERS/Lam Yik

January 24, 2022

By Jamie Freed

(Reuters) -Hong Kong’s Cathay Pacific Airways Ltd said on Monday that it expected to post a narrower-than-expected HK$5.6 billion ($719.05 million) to HK$6.1 billion annual loss for 2021 but that cash burn was rising because of stricter quarantine measures.

The forecast loss compared with the average HK$10.2 billion estimate from 12 analysts polled by Refinitiv, and the airline’s larger 2020 loss of HK$21.65 billion, which included aircraft impairments and restructuring charges.

Cathay, which posted a HK$7.57 billion loss in the first half of 2021, said it had generated some positive cashflow in the second half amid strong cargo demand.

However, it forecast it would burn through HK$1 billion to HK$1.5 billion of cash a month starting in February after the government tightened crew quarantine restrictions, forcing the airline to cut cargo and passenger capacity sharply.

Cathay is operating about 2% of its pre-pandemic passenger capacity and about 20% of its pre-pandemic cargo capacity in January.

“Until conditions improve, we are doing everything in our power to maximise capacity, and estimate that mitigation measures to increase crew resources will enable us to operate approximately an additional 5% more cargo flight capacity than we are currently operating,” Cathay Chief Executive Augustus Tang said in a statement.

($1 = 7.7880 Hong Kong dollars)

(Reporting by Jamie Freed in Sydney; Editing by Christopher Cushing and Gerry Doyle)

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