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Cathay Pacific’s first-half loss shrank by nearly a quarter

Cathay Pacific

It posted a net loss of US$973 million, in line with the company’s guidance that it would be somewhat smaller than the prior year

Cathay Pacific Airways Ltd said on Wednesday its first-half loss shrank by nearly a quarter, helped by a drastic reduction in headcount and strong air cargo demand.

But the Hong Kong-based carrier, which lacks a domestic market, remains badly hit by border closures amid the pandemic, with passenger revenue dipping 93% during H1 2021.

COVID-19 continued to pose significant challenges for the Cathay Group in the first half of 2021 and this continues to be the toughest period in our history, Chairman Patrick Healy said in a statement.

It posted a net loss of HK$7.57 billion (US$973 million), in line with the company’s guidance that it would be somewhat smaller than the prior year. That included HK$500 million (US$64.25 million) of impairment charges mainly related to 11 grounded planes which are unlikely to return to service as well as HK$403 million (US$51.79 million) of restructuring costs.

However, Healy said demand for air cargo, which saw yields surge 24% and accounted for 80% of all revenue, was expected to continue to be robust.

Shares in Cathay rose 1.9% after the news.

Cathay expects to reduce its monthly cash burn in the second half as rules are eased for vaccinated crew and passenger capacity rises to 30% of pre-pandemic levels in Q4 of this year.

According to the average of 14 estimates compiled by Refinitiv, it is likely to report a HK$9.85 billion (US$1.27 billion) full-year loss, which would represent a much-improved second half.

The airline last year cut costs with the loss of 5,900 jobs and also ended its regional Cathay Dragon brand. It has since shifted remaining pilots and cabin crew to lower-paid contracts and closed overseas pilot and flight attendant bases, resulting in additional job losses.

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