Cathay Pacific expects ‘substantial loss’ this year

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A Cathay Pacific staff member wearing a facemask next to a row of self-check in terminals in Hong Kong.

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Cathay Pacific said it expects a “substantial” loss in the first half of this year as the impact of the coronavirus takes it toll.

The Hong Kong carrier also saw a 28% drop in 2019 profits as it struggled during the city’s political protests.

The airline is now battling with the fallout of the outbreak as passenger numbers plummet.

The first half of 2020 is “expected to be extremely challenging financially,” said chairman Patrick Healy.

Calling 2019 a “turbulent year”, Mr Healy said he expects “our passenger business to be under severe pressure this year and that our cargo business will continue to face headwinds”.

While Cathay Pacific has reduced flights to help save costs, “we expect to incur a substantial loss for the first half of 2020,” he added.

The airline posted a net profit of HK$1.69bn (£170m) for last year, down from a HK$2.35bn profit in 2018.

The airline industry faces a loss of revenue of up to $113bn this year, according to an aviation trade body IATA, as thousands of planes are grounded amid travel restrictions across the globe.

After UK-based airline Flybe went into administration last week, analysts are warning of more failures to come for the embattled airline industry.

Earlier this week, Korean Air warned the coronavirus outbreak could threaten its survival, in a memo sent to employees.

The global spread of the coronavirus has hit both holidaymakers and business travellers. The Global Business Travel Association said on Wednesday that 43% of its member companies have cancelled business trips booked for this month.

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