Cathay Pacific expects to incur a “substantial loss” in the first half of 2020 but bosses believe the airline can stay afloat with the extreme cost cutting measures it is taking.
Hong Kong’s airline expects to make further capacity cuts but will continue to take aircraft deliveries, anticipating an upturn.
The group has been struck particularly hard by the outbreak of the virus which comes on the back of months of protests and political turmoil in the country.
Patrick Healy, Cathay’s chairman, said in statement: “Following the impact of social unrest in Hong Kong in the latter half of 2019, the first half of 2020 was expected to be extremely challenging financially, with an already reduced winter season capacity. This has been exacerbated by the significant negative impact of Covid-19.”
The airline revealed in its full-year results a near 30% fall in earnings in 2019 down to $218 million. It has continued to make huge capacity cuts as demand for travel to and from Asia evaporates.
Mr Healy said: “We expect our passenger business to be under severe pressure this year and that our cargo business will continue to face headwinds.”
But he added: “Our plan to take delivery of 70 new and more fuel-efficient aircraft by 2024 remains unchanged.”
Despite the challenges, Cathay said its available unrestricted liquidity was HK$20.0 billion and said it was cautiously optimistic about the cargo market.
Last month, the group’s CEO asked Cathay’s 27,000-strong workforce, including senior management, to take unpaid leave. It did not announce any job cuts in its statement on Wednesday.