Cathay says he will maintain executive pay cuts and asks staff to take a special leave schedule to preserve cash.
Cathay Pacific Airways Ltd of Hong Kong said on Wednesday it was focusing on preserving cash flow after recording a record annual loss of HK $ 21.65 billion ($ 2.79 billion), caused by a slower travel, restructuring costs and fleet reductions.
He described 2020 as “the most difficult 12 months in its more than 70-year history” as the coronavirus pandemic caused an unprecedented disruption to global air transport.
The 2020 loss compared to 2019 profit of HK $ 1.69 billion ($ 218 million) and was worse than an average forecast of a net loss of HK $ 19.9 billion (2 , $ 56 billion) by 13 analysts, according to data provider Refinitiv.
“Market conditions remain tough and dynamic,” Cathay Pacific President Patrick Healy said in a statement. “All of our cash flow preservation measures will continue unabated. The executive pay cuts will remain in place throughout 2021. “
Cathay does not have a domestic market at a time when international borders are largely closed due to the coronavirus pandemic. In December, Cathay’s passenger count fell 98.7% from a year earlier, although freight transport was down 32.3%.
Almost 60% of its 2020 revenue of HK $ 47.9 billion ($ 6.17 billion) came from its freight operations, up from around 20% in 2019.
The airline said in January it would reduce passenger capacity by 60% and cargo capacity by 25% due to new rules requiring crew to be quarantined for two weeks at hotels before resuming a normal life in Hong Kong, which came into effect on February 20.
As a result, Cathay put most of her crew on voluntary lists of three weeks flying, two weeks in a hotel, and two weeks off at home.
Cathay said the quarantine rules would increase cash consumption from around HK $ 300 million ($ 38.6 million) to HK $ 400 million ($ 51.5 million) per month, in addition to its previous 1-1.5 billion Hong Kong dollars (129 to 193 million dollars). m) levels.
The airline issued in January 6.74 billion Hong Kong dollars (868 million dollars) of convertible bonds to strengthen its liquidity.
Cathay announced in October that it would cut 5,900 jobs to help it weather the pandemic, including almost all positions at its regional airline Cathay Dragon, which it has closed.
The year 2020 had started quite promisingly for Cathay after a difficult second half of 2019, when anti-government protests rocked Hong Kong and affected traffic in the city. The carrier’s position worsened considerably with the outbreak of COVID-19 in Wuhan in late January.
At that point, on January 22, Cathay took the unusual step of issuing a press release with the first sentence all in bold, blazing at the top:
“Due to the evolution of information provided by health authorities, we will allow crew members and frontline airport employees to wear surgical masks when on duty at their discretion,” a- he declared.
Strange as it may seem now that masks are ubiquitous, politics was way ahead of its time – and an omen of chaos about to strike global air travel. A day later, the Cathay Dragon regional unit suspended flights to and from Wuhan for a month. On January 26, the suspension was pushed back to the end of March, and then things snowballed when the pandemic set in, tearing up travel plans and the aviation industry.