Cathay Pacific Posts Wider Loss In 2022

Cathay Pacific has posted its third year of annual loss, announcing on Wednesday that it was more than HK$6.5 billion in the red for 2022.

The deficit widened from the HK$5.5 billion recorded in 2021, and Cathay attributed that to losses incurred by its associate companies, including Air China and Air China Cargo.

This will be the third consecutive year that shareholders will receive no dividend.

In a filing to the Hong Kong stock exchange, the flag carrier said although its cargo revenue decreased by over 16 percent last year, its passenger revenue tripled to over HK$13 billion.

Thanks to the gradual easing of Covid restrictions, the airline said it carried a total of 2.8 million passengers in 2022 – nearly four times that of 2021.

Cathay's CEO Ronald Lam said it's very encouraging to see light at the end of the tunnel in the second half of 2022, adding that the positive momentum has continued into 2023.

"After three brutal years of the Covid-19 pandemic, we have finally entered into a new exciting phase, in which we will rebuild Cathay Pacific for Hong Kong," he said.

"So far this year, we have seen very strong demand for our flights. Whether this will continue into the latter half of this year is yet to be seen. But judging on the booking trends for the first half of the year, we are very positive about the outlook."

Lam said considering Hong Kong opened up to other destinations later than many other countries and regions, the carrier is already moving fast to catch up.

Cathay chairman Patrick Healy said the group's two airlines – Cathay Pacific and HK Express – will be able to operate at about 70 percent of their pre-pandemic flight capacity by the end of this year.

He added that it's hoped the two carriers can reach full levels in 2024.

Greg Hughes, the group's chief operations and service delivery officer, said there are sufficient frontline operational resources to support their capacity goals, adding that the company has been retraining and recruiting employees in key operational areas since mid-2022.

"We recruited over 2,000 people last year, the majority of those people were in the key operational areas. This year our target is 3,000, which we're on track to deliver," Hughes said.

Meanwhile, the company did not reveal a timeline to pay back the government deferred dividends on the preference shares, but Lam said the plan is to repay within this year.

"Our intention is to repay within this year, starting to repay the outstanding dividend," he said.

In June 2020, Cathay received a government-led bailout package of HK$39 billion to stay afloat, under which it shall pay dividends to the administration every six months until the redemption of all preference shares. The airline announced the fifth deferral of the payment last month.

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