Editorial | Cathay back on track and must remain so
- Hong Kong flag carrier is profitable once again, but it should make sure that it can withstand future shocks without resorting to government help
Hong Kong’s flag carrier has marked an important milestone on its journey to ride out pandemic turbulence. It was encouraging to see Cathay Pacific Airways wrap up its obligations under a government bailout package.
Cathay last week said it bought back the remaining 50 per cent of preference shares. The first half changed hands in December last year. Worth about HK$9.75 billion, they were issued to the government as part of the bailout.
Outstanding preference share dividends brought the total payout to HK$2.44 billion. Hong Kong’s overall investment was HK$27.3 billion. Financial Secretary Paul Chan Mo-po said nearly HK$4 billion had been added to government coffers.
The shares were part of the HK$39 billion recapitalisation package offered in 2020 as the global travel market collapsed.
Cathay Group CEO Ronald Lam Siu-por thanked the government for its “invaluable support”. In March, Cathay reported a net profit of HK$9.78 billion last year, its first since 2019, after a net loss of HK$6.62 billion in 2022.
Industry analysts have voiced confidence about the carrier’s financial position because it was able to buy back its shares relatively quickly. Strong headwinds remain, though. Hong Kong’s recovery lags behind other major hubs that reopened earlier.