LONDON – On August 10 the Hong Kong based carrier Cathay Pacific released its 2022 interim financial position, which while worrying are also showing some positive signs for the carrier.
Things not looking too bad for Cathay Pacific
To start things off for Cathay Pacific, things are definitely starting to look upwards for the group as this year for the first half, their losses aren’t as severe as last year, however, it paints a picture that there is still quite a long way to go before the carrier returns to profitability.
Cathay Pacific’s Chairman, Patrick Healy said: “The Cathay Pacific Group had an extremely difficult start to 2022. For more than two years, COVID-19 has had an unprecedented impact on global aviation with the situation often fluctuating between periods of relative improvement and significant setbacks as new variants of the virus have emerged.”
“The first half of 2022 bore similarities to the first half of 2021. The spread of a new COVID-19 variant, Omicron, led to increasingly stringent travel and operational restrictions, most notably in Hong Kong and the Chinese Mainland, which severely constrained our ability to operate flights and greatly affected the demand for travel.”
“Early in January, Hong Kong saw the introduction of a number of measures intended to combat the virus, including a ban on flights to Hong Kong from nine countries, among them key markets such as the UK and the US, and a ban on transit and transfer services via Hong Kong International Airport.”
“Quarantine rules for Hong Kong-based aircrew as well as the route-specific flight-suspension mechanism were also further tightened.”
Taking a look at the numbers
In terms of the group’s revenue, they achieved HK$18,551 million, a 17% increase compared to the first half of 2021 of HK$15,854 million. However, adding in their high operational expenses, the group’s loss for the first half of 2022 finished at a loss of HK$4,999 million, a 33.9% change when compared to 2021’s loss of HK$7,565 million.
For the shares side of things, this year’s loss per ordinary share totalled HK cents 82.3, compared to 2021’s HK cents 122.1.
Despite the higher revenue margin this year, the group’s overall liquidity position has still, unfortunately, dipped slightly when compared to the end of December 2021.
Their funds attributable to the shareholders come to HK$68,437 million, a dip of 5.3% compared to December 2021’s position of HK$72,244 million.
This has now resulted in the group’s available unrestricted liquidity standing at HK$26,701 million, compared to December 2021’s 11.7% better position of HK$30,250 million.
Due to the heavy increase in COVID-19 China and Asia restrictions that a good chunk of Asia experienced during the first half of 2022 thanks to the Omicron variant, Cathay’s ASK (Available Seat Kilometres) had dropped by 26.6% to 3,059 million when compared to the first half of 2021’s figure of 4,167 million.
However, despite the dip in ASK, the group’s RPK (Revenue Passenger Kilometres) was up by 129.7% to 1,810 million, compared to the first half of 2021’s figure of 788 million.
This increase was thanks to their number of passengers carried increasing by 113.4% to 335,000 compared to the first half of 2021’s 157,000. This was coupled with an increased load factor to 59.2% when compared to 2021’s 18.9%, a 40.3% difference.
For the group’s cargo operations, their ATK (Available Tonne Kilometres) dropped by 30.5% to 3,094 million, compared to the same period of 2021’s 4,454 million.
This was due to a small reduction in cargo carried by the group during the first half of 2022 dropping to 526,000 tonnes with a cargo load factor of 75.8%, compared to the first half of 2021’s 549,000 tonnes and a cargo load factor of 81.4%.
For Cathay’s subsidiaries, HK Express reported a loss of HK$824 million, a not as hard-hitting loss when compared to 2021’s loss of HK$976 million, a HK$152 million positive difference.
Also, Air Hong Kong’s profit this first half of 2022 had increased slightly to HK$383 million, compared to 2021’s profit of HK$374 million, a HK$9 million positive difference.
Mr Healy added: “These restrictions resulted in a particularly unfavourable first few months of 2022 and we significantly reduced our passenger and cargo flight capacities.”
“As our home city endured an especially difficult phase of the pandemic, we supported the safe movement of people and essential goods between Hong Kong and the rest of the world and preserved the fundamental integrity of our passenger and cargo networks.”
“The challenges posed by COVID-19, and the restrictions in place to combat it, placed a considerable burden on many of our employees, most notably our aircrew, thousands of whom spent countless nights in quarantine hotels.”
“I wish to extend our sincere appreciation to all our people for the selfless endeavour and extraordinary professionalism they displayed throughout this very difficult time.”
“The progressive adjustments to these restrictions from 1st May were positive developments. Adjustments to the testing and quarantine requirements for Hong Kong-based aircrew enabled us to progressively resume flights to more destinations in May and June. This included the resumption of daily London passenger flights and a full freighter schedule.”
All in all, it is evident that Cathay Pacific has continually suffered since COVID-19 emerged, however, with losses narrowing and demand for air travel beginning to return, as well as restrictions slowly easing off, the group is hopefully set for more profitable times in the not-too-distant future.