Cathay Pacific Group, home to airlines Cathay Pacific and Cathay Dragon, has had a lot to deal with as of late... The company expects to incur a massive loss for the first half of 2020, profit warnings just released reveal that passenger numbers for the airlines dropped 99% in June compared to the same period in 2019.
The blood loss continues as the airline anticipates a net loss of $1.3bn for the six months ended June 30th, 2020. This is a massive reversal compared to a $167m profit the previous year and makes up the airline’s most significant loss and $309m of the net loss are impairment charges for 16 aircraft. The Group believes these aircraft only resume “meaningful economic service”
in the summer period of 2021.Problem, Reaction... Solution?
The airline was mainly sending passengers to locations in Southeast Asia, Mainland China, and Europe. This mimics Cathay Pacific’s figures for April, where there was a 99.6% drop in contrast with the previous year. Towards the end of June, Cathay Pacific restarted more long-haul services. Destinations included New York, San Francisco, Amsterdam, and Melbourne. However – A resurgence of round 2 of the travel virus and with new quarantine measures in place, and several countries experiencing a second and third wave of the bug, people are either not allowed to fly, or simply not ready? The Cargo-Only Flights
The airlines transported 93,228 tonnes of cargo and mail last month, a 43.1% drop from June 2019. The month’s “revenue freight tonne km (RFTKs) fell 35.8% year on year”
. The overall flight capacity has increased to 7% in July, a mere 3% increase from last month. In August, the number will go up to 10%.
Even with more services in operation, the airline continued to carry an average of 900 passengers daily in June. This leads us to the bigger story of the recently gained approval from Cathay Pacific Group shareholders for a $5 billion recapitalisation plan
. After securing the funds and further review of the future of the airline, Cathay Pacific just might be able to weather this storm.
View longer https://simpleflying.com/cathay-pacific-profit-warning/