Cathay Pacific Loses HK$2 Billion a Month Amidst Pandemic

Cathay Pacific reportedly has a net cash outflow of HK$2 billion each month to support its business.

Augustus Tang Kin-wing, CEO of Cathay Pacific, said the situation was “unsustainable”.

Tang said “The cash burn will continue to be significant until the number of passengers return to a certain level,” said Tang, adding that he doesn’t have a target for the passenger numbers.

Cathay Pacific currently carries 1,500 passengers per day, when the carrier averages 100,000 “in any previous normal year” according to the CEO.

Tang believes that the aviation industry will not recover until there is a vaccine that “has been proven and made widely available and acceptable”.

Tang continued “Before that condition is reached, the demand for air travel will probably be just suppressed. Once an effective vaccine becomes widely available, however, I think the demand will be tempered initially. Over a longer period of time, there will still be growth, but the growth may not be as strong as before,”

The Cathay Pacific Group is currently undergoing strategic review, but Tang said a net cash outflow will continue in the short term even after the “restructuring of business” has been completed.

Tang said “The general top-level plans include bold moves to improve our overall competitiveness and cost efficiency, enable us to provide a stronger, more competitive offering, and the inevitable rationalization of the routes and right-sizing of the airlines,”

Cathay Pacific’s operating passenger flight capacity is around 10% in October, with a similar level in September.