Cathay Pacific narrows loss but COVID rules on crew cloud outlook

A Cathay Pacific plane takes off on the airport, through the coronavirus illness (COVID-19) pandemic, in Hong Kong, China, March 31, 2022. REUTERS/Tyrone Siu/

HONG KONG, Aug 10 (Reuters) – Cathay Pacific Airways Ltd (0293.HK) mentioned Hong Kong’s strict COVID guidelines for air crew have been crimping the airline’s capability to take advantage of rising demand for journey, at the same time as its first-half loss narrowed to HK$5 billion ($636.98 million).

The provider is falling behind conventional rival Singapore Airways Ltd (SIA) (SIAL.SI) in restoring worldwide capability as roster preparations are difficult by a quarantine requirement for Hong Kong-based crew of passenger planes to spend three nights in lodges on their return from every journey.

The monetary hub can also be one of some locations on the earth, together with mainland China and Taiwan, to nonetheless require COVID-19 quarantine for arriving passengers, although such lodge stays are to be lower to 3 days from seven, officers mentioned this week. learn extra

Cathay’s first-half income rose 17% to HK$18.6 billion, pushed by a rise in ticket gross sales and protracted robust demand for air cargo, though passenger numbers stayed 95.2% under pre-pandemic ranges in June.

Its loss was narrower than the HK$7.57 billion reported a 12 months earlier, with money circulation turning constructive towards the top of the interval, and it expects monetary outcomes to enhance within the second half.

“We count on each the pent-up passenger demand and cargo peak season to result in a second-half return to profitability,” Jefferies analyst Andrew Lee mentioned in a observe.

The corporate’s shares rose after the outcomes by as a lot as 3.3%, to face at their highest since June 2020, earlier than giving up some positive factors to commerce up 1%.

Cathay reiterated on Wednesday that it anticipated passenger capability to method as much as 1 / 4 of pre-pandemic ranges by the top of the 12 months, up from 11% in June.

Chairman Patrick Healy mentioned the airline’s big backlog of retraining necessities for crew, a lot of whom had not flown for greater than a 12 months, couldn’t be resolved till quarantine guidelines have been lifted.

“This, mixed with different operational complexities, implies that capability can solely be elevated progressively over a interval of a number of months, following the removing of all COVID-related working constraints,” he instructed reporters.

In Singapore, which has dropped obligatory quarantine, SIA mentioned final month it had swung to a internet revenue of S$370 million ($268.49 million) within the June quarter, when it operated at 61% of pre-pandemic capability. SIA expects that determine to rise to 81% by the top of December. learn extra

As curbs ease, Cathay is readying to convey extra planes out of storage to revive Hong Kong’s standing as an air transport hub, although the pace relies upon partly on the easing of crew quarantine guidelines, operations head Greg Hughes mentioned. learn extra

The airline reaffirmed its objective of hiring greater than 4,000 employees to fill operational wants over the following 18 to 24 months as journey rebounds, after having lower greater than 6,000 jobs through the pandemic.

Pilot attrition has additionally been greater than regular due to the onerous quarantine necessities, mixed with everlasting pay cuts of as a lot as 58%. learn extra

Cathay is anticipated to report a full-year lack of HK$4.5 billion, in accordance with a mean of 11 analyst estimates compiled by Refinitiv.

($1=1.3781 Singapore {dollars})

($1=7.8495 Hong Kong {dollars})

Reporting by Jamie Freed in Sydney and Farah Grasp in Hong Kong; extra reporting by Donny Kwok in Hong Kong; Enhancing by Gerry Doyle and Clarence Fernandez

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