Cathay Pacific trims first half losses

Cathay Pacific Airways trimmed first-half losses as a gradual relaxation of Covid-19 restrictions at its Hong Kong base helped a recovery in carryings.

But the airline’s ability to add capacity remains constrained by rules for air crew on passenger flights to spend three days in quarantine in hotels upon returning to Hong Kong.

Hong Kong is one of the few places in the world, along with mainland China and Taiwan, to still require Covid-19 quarantine for arrivals, though such hotel stays are to be cut to three days from seven, officials in the financial hub said this week.

Cathay Pacific expects passenger capacity to approach up to 25% of pre-pandemic levels by the end of the year, up from 11% in June, and is now targeting positive cash flow.

Chairman Patrick Healy said: ”We will only be able to operate more flight capacity when the existing stringent travel restrictions and quarantine requirements applicable to Hong Kong-based air crew are lifted.”

The airline is preparing to bring back more aircraft from storage as restrictions ease to restore Hong Kong’s status as an air transport hub.

The loss of HK$5 billion ($637 million) compared to HK$7.57 billion in the same period last year.

First-half revenue rose 17% to HK$18.6 billion, driven by a rise in ticket sales and strong cargo demand, although passenger numbers stayed 95.2% below pre-pandemic levels in June.

The airline had said in June that it expected a lower first-half loss than the previous year, but warned the figure would still be “substantial”.

Cathay Pacific expects financial results to improve in the second half of 2022.

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