Cathay Pacific expects annual loss despite second-half improvement

Hong Kong's Cathay Pacific Airways Ltd on Friday forecast a “substantial” annual loss even though second-half results are expected to improve sequentially thanks to an uptick in travel and air cargo demand.

The airline carried over 400,000 passengers last month (Oct) and saw an increase of 424.5 percent compared with October 2021. Yet, the number also marked an 85.4 percent decrease compared with the pre-pandemic level in October 2019.

In the first ten months of 2022, the number of passengers carried increased by 166 percent as compared with the same period in 2021.

Cathay also carried 109,425 tonnes of cargo last month, a decrease of one-fifth compared with October 2021, and a two-fifths decrease compared with the same period in 2019.

“The group has already announced the addition of about 3,000 passenger flight sectors from October until the end of December this year and is on track to achieve its target of operating up to one-third of pre-pandemic passenger flight capacity levels by the end of 2022,” said Ronald Lam Siu-por, the airline's chief customer and commercial officer.

“At the same time, our second-half 2022 results for our airlines and subsidiaries are expected to see a marked improvement over our first-half 2022 results, although still a loss overall for the full year of 2022.

“Earlier this week, the group – comprising passenger airlines Cathay Pacific and HK Express – announced that it anticipates it will be operating around 70 percent of pre-pandemic passenger flight capacity by the end of 2023, with an aim to return to pre-pandemic levels by the end of 2024.”

Cathay reported a first-half loss of HK$5 billion (US$639.11 million) and analysts expect it to record an annual net loss of HK$3.8 billion, according to Refinitiv IBES estimates. It reported a HK$5.5 billion loss last year.

“Travel demand for the rest of 2022 continues to improve and is promising for the Christmas holiday period,” Lam also said.