After reporting a surprising profit in the second half of 2021 due to cost reduction and a strong cargo market, Cathay Pacific Airways (OTC:CPCAY) Ltd said on Monday that it expects to continue burning funds due to stronger crew quarantine measures.
The airline predicted a loss of HK$5.6 billion to HK$6.1 billion in fiscal year 2021, significantly below the average HK$10.2 billion projection of 12 analysts polled by Refinitiv and its HK$21.65 billion loss in fiscal year 2020.
The full-year prediction was also lower than the HK$7.57 billion loss in the first half, with Cathay predicting positive cashflow creation in the second half.
However, the airline predicted that starting in February, it would burn through HK$1 billion to HK$1.5 billion in cash per month as the government tightened crew quarantine regulations, causing the carrier to drastically reduce cargo and passenger capacity.
In January, Cathay Pacific was running at around 2% of its pre-pandemic passenger capacity and 20% of its pre-pandemic cargo capacity.
Singapore Airlines (OTC: SINGY) Ltd, which also lacks a local market but has less stringent travel constraints, predicts that in January and February, it will hit 47 percent and 45 percent of pre-COVID passenger capacity, respectively.
Cathay Pacific's February and March timetables appear to be similar to January's, with only a few flights each month to places including London, Sydney, and Tokyo, which had several daily flights prior to the pandemic. Flights to China's
"Until conditions improve, we are doing everything we can to maximize capacity," Cathay Chief Executive Augustus Tang said in a statement. "We estimate that mitigation measures to increase crew resources will enable us to operate approximately 5% more cargo flight capacity than we are currently operating."
Hong Kong has stopped transit flights from most of the world as part of its "zero-COVID" plan in the hopes of opening its border with mainland China.
After two Cathay Pacific crew members breached self-isolation restrictions, a COVID-19 epidemic erupted in the city, the financial center tightened crew
After two Cathay Pacific crew members breached self-isolation restrictions, a COVID-19 epidemic erupted in the city, the financial center tightened crew quarantine standards last month.
Following the breaches, the two were sacked, detained, and charged.
(1 Hong Kong dollar = 7.7880 Hong Kong dollars)
