Cathay Pacific has reported a net loss of HK$21.648bn ($2.8bn) for 2020 compared to a profit of HK$1.691bn in 2019. The loss for 2020 is net of the receipt of HK$2.689bn of COVID-19-related government grants globally and includes impairment and related charges of HK$4.056bn relating to 34 aircraft that Cathay states are “unlikely to re- enter meaningful economic service again before they retire or are returned to lessors”.
Cathay also reported nearly HK$4bn of restructuring costs inclusive of a HK$1.59bn write off of a deferred tax asset at Cathay Dragon.
Cathay announced a HK$39bn recapitalisation in June 2020 and its large scale restructuring in October 2020. The group reports that the restructuring has resulted in the loss of 8,500 positions and the discontinuation of Cathay Dragon at a cost of HK$2.4bn, although savings are estimated at HK$500 million per month. Cathay has reduced monthly cash burn from HK$1.5-2.0 billion to HK$1.0-1.5 billion.
Cathay has now put most of its crew on three-week shifts followed by two weeks in a hotel, then two weeks off at home. This has increased Cathay’s cash burn by up to 27 per cent, or $245m a month. Passenger capacity has fallen 60 per cent and cargo by a quarter.