Cathay Pacific Group expects to increase monthly cash burn by about HK $ 300-400 million ($ 38.7-51.6 million), following the Hong Kong government's decision to impose mandatory quarantine measures on the entire flight crew entering the city for more than two hours.
In addition to adding 1 to 1.5 billion Hong Kong dollars to its current monthly cash outlay, the carrier reveals that its "initial assessment" is that measures, including 14-day hotel quarantine and seven-day medical monitoring requirements, could reduce passenger capacity. By 60%, as well as reducing cargo capacity by 24%.
"The true extent of this impact has not yet been confirmed and will be influenced by a number of factors, including the success of the mitigation measures we can take, such as lean human resource management," says Ronald Lam, chief commercial and client at Cathay Group.
The new measures, first reported in local media and set to take effect in February, are likely to exacerbate the airline's faltering financial situation.
In December, Cathy had already warned of a "much higher" loss for the six months ending December 31, as passenger traffic continued to slump amid the coronavirus pandemic.
It decreased to a record operating loss of 8.7 billion Hong Kong dollars during the first half of 2020. Last October, it shed 5,900 jobs across the group and shut down the Cathay Dragon brand. These measures consumed nearly 500 million HK dollars in its monthly cash outlay.
In the airline's latest traffic results, Lam pointed to the `` big challenges '' the company continues to face, including new quarantine measures, as well as the suspension of flights to the UK in late December after the discovery of a new strain of coronavirus.
On December 28, it was carrying only 490 passengers, the lowest number in a single day in more than six months, Lam says.
In December, it carried fewer than 40,000 passengers. While it was a slight rebound compared to the November numbers, it still represented a 99% decline in the same month in 2019. This month's traffic was down 98%, with capacity reduced by 91%. On an annual basis.
For the entire year, Cathay’s passenger numbers are down 87% to 4.6 million in 2020. Year-round traffic is down 85% with capacity reduced by 79% year-on-year.
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