Business & Investment

Cathay Pacific burns cash according to Reuters bitten crew quarantine rules

© Reuters. File Photo: Signs of Cathay Pacific are seen on October 21, 2020 at Cathay Pacific headquarters in Hong Kong, China.Reuters / Ramik

Jamie Fried

(Reuters)-Hong Kong Cathay Pacific (OTC :) Ltd made unexpected profits in the second half of 2021 due to cost savings and a strong freight market, after which crew quarantine measures tightened and cash burned. He said he was planning to resume. ..

The airline forecasts an annual loss of HK $ 5.6 billion to HK $ 6.1 billion in 2021, with an average of HK $ 10.2 billion estimated by 12 analysts polled by Refinitiv and HK $ 21.65 billion in 2020. It is well below the loss.

Full-year forecasts are also narrower than the loss of HK $ 7.57 billion in the first half, showing Cathay’s positive cash flow generation in the second half.

However, airlines have cashed between HK $ 1 billion and HK $ 1.5 billion a month from February to February after the government tightened quarantine restrictions on crew and forced airlines to significantly reduce cargo and passenger capacity. Is expected to run out.

Cathay operates approximately 2% of its pre-pandemic passenger capacity and approximately 20% of its pre-pandemic cargo capacity in January.

Rival Singapore Airlines (OTC :) Ltd has no domestic market, but travel rules are less stringent and predict to reach 47% and 45% of pre-COVID passenger capacity in January and February, respectively.

The February and March schedules posted on Cathay’s website are about as light as January, to destinations such as London, Sydney, and Tokyo, where there were multiple flights a day before the pandemic. There are only a few flights a month. Flights to mainland China are less affected.

“Until the situation improves, we are doing our best to maximize capacity, and mitigation measures to increase crew resources will allow us to fly about 5% more cargo than we currently have in operation. We estimate that we will be able to operate our capacity, “Tang said in a statement.

Hong Kong, which has pursued a “Zero Corona” strategy in the hope of opening the border with mainland China, has suspended transit flights from most of the world.

The financial center introduced stricter crew quarantine rules last month after two Cathay crew members who broke self-quarantine measures caused an outbreak of COVID-19 in the city.

The two were subsequently dismissed, arrested and charged with violations.

($ 1 = 7.7880 HK $)

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Cathay Pacific burns cash according to Reuters bitten crew quarantine rules

https://www.investing.com/news/stock-market-news/cathay-pacific-to-post-narrowerthanexpected-2021-annual-loss-2745842 Cathay Pacific burns cash according to Reuters bitten crew quarantine rules

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