“Market conditions remain challenging and dynamic,” said Healy. “It is by no means clear how the pandemic and its impact will develop over the coming months.”

In light of the soaring losses, he added: “All our cash preservation measures will continue unabated.”

Staff have been urged by top management to get vaccinated, and executives brushed off the increasing number of no-shows at the city’s inoculation centres, saying take-up among Cathay employees was “strong”.

The airline’s hopes of a rebound in global travel are tied to high vaccination rates in key markets and the reopening of borders by summer 2021, which the company said remained hard to predict.

“We are actively encouraging all our staff, including our aircrew, to sign up for vaccinations. The vaccination sign-up rates are strong and encouraging … and we hope it’ll assist us in our ongoing conversations with the Hong Kong government to relax the crew quarantine restrictions,” Healy said.

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Hong Kong’s Cathay Pacific Airways posts record loss of HK$21.6 billion for 2020

Hong Kong’s Cathay Pacific Airways posts record loss of HK$21.6 billion for 2020

Since the implementation of the tightened quarantine rules for flight staff, the embattled carrier has been losing between HK$1.3 billion and HK$1.9 billion a month – more than it had anticipated. Last year, the company cut 5,900 jobs, lowered pay for flight staff and shut its regional brand, Cathay Dragon.

The company said there was no immediate need to cut more jobs, but it did not rule out the possibility amid the ever-changing crisis.

Losses in the second half of 2020 increased to HK$11.8 billion, up from HK$9.9 billion in the first six months of the year, driven by larger-than-expected restructuring charges and a reduction in the value of assets, such as aircraft. Stripping out one-off charges, such as writing off the value of certain assets, the airline lost a total of HK$13.9 billion.

Cathay’s air freight operations have been the only thing saving the company – one of the largest cargo airlines in the world – from recording even deeper losses, as prices soared due to the high demand for shipments and fewer planes flying during the pandemic. Cathay said it was considering a potential expansion of its cargo business.

Cathay Pacific warns of ‘extremely challenging’ months ahead

Meanwhile, Hong Kong’s inoculation drive has experienced a decline in the take-up rate for jabs, which has been linked to increasing public concern over people seeking hospital treatment after taking the Sinovac vaccine. More than 110,000 people in Hong Kong have so far received a Covid-19 vaccine.

Healy on Wednesday reiterated his belief in a vaccine-led recovery but warned the “correlation” between vaccinations and the relaxation of travel restrictions remained “highly uncertain and difficult to predict”.

“Our short-term outlook continues to be challenging. However, we remain absolutely confident in the long-term future and competitive position of our airlines.”

The company also reaffirmed its expectation that flight activity would increase from its current skeleton schedule, which is just a tenth of pre-pandemic levels. However, capacity is expected to remain at less than 50 per cent for 2021 as a whole.

In an internal memo detailing the financial results, CEO Augustus Tang Kin-wing again urged all employees to get vaccinated, saying inoculation campaigns would help bring about the lifting of travel restrictions.

Executives would continue to receive a lower salary throughout this year, and a majority of local ground staff and overseas employees had opted to take a pay cut, the company said.

The latest financial results showed the airline generated HK$46.9 billion in revenue for 2020, more than halving the 2019 figure, with 60 per cent of that earned through its air freight business.

Hong Kong’s largest airline has suffered two years of tumult: the 2019 anti-government protests which spread to Cathay’s home – the city’s airport – and a Beijing-requested management upheaval were followed by the catastrophe of the coronavirus pandemic.

The airline turned to the government and shareholders in June 2020 for a HK$39 billion bailout to avoid going bust. During the pandemic, travel has been discouraged by sweeping border closures in the markets where Cathay operate and quarantine measures to stave off the importation of the virus into Hong Kong.

The airline has endured a 99 per cent fall in its daily number of passengers – from an average of 100,000 a day – and has been especially hard hit as it has no domestic flights to fall back on.

Challenges have continued in 2021, as the airline revealed in January it carried fewer than 1,000 passengers a day for the first time since June last year. The company in February tapped debt markets for HK$6.7 billion through convertible bonds to bolster its balance sheet.

The airline said it had a war chest of HK$28.6 billion as of the end of last year, an amount chairman Healy described as “healthy”. He also signalled a willingness to seek commercial sources of fundraising rather than turning to the government for another bailout.

Luya You, a Bocom International transport analyst, said: “I think Cathay’s latest forecasts for 2021 clearly take into account the uncertainty surrounding vaccine uptake in [Hong Kong] and key markets. Improvement by the second half is looking to be more conditional on vaccine progress than ever.”

She added: “Cathay is also in a difficult situation in which it needs to monitor vaccine uptake in multiple markets, as we all know they can’t rely on any single domestic market.”