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Hong Kong’s Cathay Pacific has warned shareholders to expect a $1.3 billion (HK$10 billion) loss for the first half of 2020 after the carrier flew almost 100% fewer passengers in June compared to the same month last year.
Cathay Pacific’s warning comes just days after shareholders approved a HK$39 billion bailout plan to save the company.
The airline’s record half-year projected loss compares to a HK$1.3 billion ($167 million) profit in the first six months of 2019.
Chief customer and commercial officer Ronald Lam said that the carrier is yet to see any significant signs of immediate improvement despite some increased demand from neighbouring countries and the US.
“We have adjusted our overall capacity for July to approximately 7%, which remains subject to the potential further relaxation or tightening of government health measures,” said Lam.
“We expect that our airlines will operate up to 10% of the normal flight schedule in August and will continue to assess the potential of increasing more flights and adding destinations for our customers in the coming months.
Cathay’s estimated losses include HK$2.4 billion of impairment charges relating to 16 aircraft that are unlikely to re-enter meaningful economic service again before the 2021 summer season.
Lam said that while some markets are starting to relax border restrictions and quarantine requirements in July, the airline remains “cautious and agile in our approach to resuming our passenger flight services”.
“We have adjusted our overall capacity for July to approximately 7%, which remains subject to the potential further relaxation or tightening of government health measures.
“We expect that our airlines will operate up to 10% of the normal flight schedule in August and will continue to assess the potential of increasing more flights and adding destinations for our customers in the coming months.”
Lam added: “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.”