Cathay Pacific burning cash again as Covid restrictions bite

[HONG KONG] Cathay Pacific Airways is once more burning through cash as Hong Kong's spiralling Covid-19 outbreak reduces the airline's flying to a trickle.

The carrier will go through between HK$1 billion (S$174.5 million) and HK$1.5 billion every month "until conditions improve," chief executive officer Augustus Tang said in a note to staff on Wednesday (Mar 9) that was seen by Bloomberg News. A Cathay representative confirmed the memo's authenticity.

It's a swift and bleak reversal for the city's marquee airline. Tang said in his note that Cathay's monthly operating cash burn was as high as HK$3 billion in the first half of 2020 - as the pandemic laid waste to global aviation. The metric had become "marginally positive" in the second half of 2021, he said.

Flight bans and quarantine restrictions while Hong Kong fights Covid-19 have reduced Cathay's passenger flying to 2 per cent of pre-pandemic capacity, the airline said on Wednesday as it reported a net loss for 2021.

Cathay's "available unrestricted liquidity" was HK$30.3 billion at the end of 2021, Tang said in in his note. "This healthy liquidity position gives us great confidence that we can overcome the ongoing challenges and emerge from this crisis as a more focused, efficient and more competitive airline," he said. BLOOMBERG