Cathay Pacific shares rise as Hong Kong’s flagship carrier expects 2021 losses to narrow on cargo demand and belt-tightening measures

Cathay’s net loss is likely to be between HK$5.6 billion (US$719 million) and HK$6.1 billion last year, significantly lower than the HK$21.6 billion loss in 2020

Outlook for 2022 looks bleak because of Hong Kong’s decision to reimpose tighter travel restrictions to contain the spread of Omicron, the company statement says

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A Cathay Pacific jet prepares to land at Hong Kong International Airport. The airline is expect to post a smaller loss for 2021. Photo: EPA-EFE

Published: 12:12pm, 24 Jan 2022Updated: 4:22pm, 24 Jan 2022

Shares of Cathay Pacific Airways rose in Hong Kong close to a two-month high, defying a slump in the local stock market, after it said losses for 2021 were expected to narrow significantly on the back of strong demand for cargo and cost-cutting measures.

Cathay Pacific shares climbed by as much as 1.2 per cent in Monday trading to HK$6.67, hovering near their highest level since November 26. The stock closed unchanged at HK$6.59, while the benchmark Hang Seng Index slumped 1.2 per cent.

The net loss at Hong Kong’s flagship carrier is likely to be between HK$5.6 billion (US$719 million) and HK$6.1 billion last year, smaller than HK$21.6 billion in 2020, according to an exchange statement by Swire Pacific, its biggest shareholder. Still, the carrier forecast a bleak business outlook for this year, as the city reimposed tight travel restrictions to contain the spread of the Omicron coronavirus strain.

“The improvement was primarily driven by strong cargo demand, high cargo yield and load factors, together with continued focus on effective cash and cost management,” chief executive Augustus Tang said in the statement. “Throughout 2021, we deployed all available capacity to meet the consistently high demand, achieving strong yield and high load factors and transporting a wide range of goods including daily necessities, fresh produce, electrical items and pharmaceutical products.”

Cathay Pacific staff at Hong Kong International Airport. The airline flew 717,059 passengers last year, compared with 4.6 million in 2020. Photo: Xiaomei Chen

Cathay Pacific carried about 1.3 million tonnes of cargo in 2021, almost unchanged from 2020 but lower than the 2 million tonnes in 2019, the statement said. It flew 717,059 passengers last year, contracting from 4.6 million in 2020 and 35.2 million in 2019.

The company is still in the process of putting the final work on the annual result that is due in March, it said.