HONG KONG: Hong Kong flag carrier Cathay Pacific on Friday predicted a return to profitability in the first half of 2023 as it benefits from rising travel demand following the relaxation of strict Covid containment measures.
However, the airline is still falling behind regional rivals such as Singapore Airlines owing to Hong Kong’s belated axing of pandemic curbs, and is racing to rebuild its capacity amid a manpower crunch.
The Cathay Group has seen a “strong rebound in the performance of our airlines”, the company said in a press release.
“We expect that the Group will deliver a consolidated profit for the first half of 2023.”
The forecast stood in sharp contrast to the airline’s HK$5 billion (US$640 million) loss in the first half of 2022, when the city suffered its deadliest wave of the coronavirus pandemic.
Despite improving fortunes in the second half, Cathay still ended up with an annual loss of US$834 million after what the company described as “another challenging year”.
On Friday it said travel demand was strong in May and looked forward to a “promising” peak summer season, adding that trimming its interest in Air China from 18.13 to 16.26 percent will lead to a “one-off non-cash gain” of around US$243 million. It is due to report its earnings in August.
Cathay carried 6.3 million passengers in the first five months of the year, compared with just 190,000 in the same period last year.
The airline has said did not expect passenger numbers to return to pre-pandemic levels until the end of 2024.
“Profit this year is likely to be constrained only by Cathay’s capacity ramp-up, which lags peers that are reporting record earnings,” Bloomberg Intelligence aviation analysts Tim Bacchus and Eric Zhu said.
The airline’s recovery recently hit a stumbling block when three cabin attendants were accused of discriminating against Chinese passengers, sparking outrage in mainland China.
Cathay has since announced that it will recruit more staff from the mainland and increase the number of Mandarin-speaking flight attendants.
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