HONG KONG, Aug 10 (Reuters) - Cathay Pacific Airways Ltd
said Hong Kong's strict COVID rules for air crew were
crimping the airline's ability to exploit rising demand for
travel, even as its first-half loss narrowed to HK$5 billion
The carrier is falling behind traditional rival Singapore
Airlines Ltd (SIA) in restoring international capacity
as roster preparations are complicated by a quarantine
requirement for Hong Kong-based crew of passenger planes to
spend three nights in hotels on their return from each trip.
The financial hub is also one of a few places in the world,
along with mainland China and Taiwan, to still require COVID-19
quarantine for arriving passengers, though such hotel stays are
to be cut to three days from seven, officials said this week.
Cathay's first-half revenue rose 17% to HK$18.6 billion,
driven by an increase in ticket sales and persistent strong
demand for air cargo, although passenger numbers stayed 95.2%
below pre-pandemic levels in June.
Its loss was narrower than the HK$7.57 billion reported a
year earlier, with cash flow turning positive toward the end of
the period, and it expects financial results to improve in the
"We expect both the pent-up passenger demand and cargo peak
season to lead to a second-half return to profitability,"
Jefferies analyst Andrew Lee said in a note.
The company's shares rose after the results by as much as
3.3%, to stand at their highest since June 2020, before giving
up some gains to trade up 1%.
Cathay reiterated on Wednesday that it expected passenger
capacity to approach up to a quarter of pre-pandemic levels by
the end of the year, up from 11% in June.
Chairman Patrick Healy said the airline's huge backlog of
retraining requirements for crew, many of whom had not flown for
more than a year, could not be resolved until quarantine rules
"This, combined with other operational complexities, means
that capacity can only be increased gradually over a period of
several months, following the removal of all COVID-related
operating constraints," he told reporters.
In Singapore, which has dropped mandatory quarantine, SIA
said last month it had swung to a net profit of S$370 million
($268.49 million) in the June quarter, when it operated at 61%
of pre-pandemic capacity. SIA expects that figure to rise to 81%
by the end of December.
As curbs ease, Cathay is readying to bring more planes out
of storage to restore Hong Kong's status as an air transport
hub, though the speed depends in part on the easing of crew
quarantine rules, operations head Greg Hughes said.
The airline reaffirmed its goal of hiring more than 4,000
staff to fill operational needs over the next 18 to 24 months as
travel rebounds, after having cut more than 6,000 jobs during
Pilot attrition has also been higher than normal because of
the onerous quarantine requirements, combined with permanent pay
cuts of as much as 58%.
Cathay is expected to report a full-year loss of HK$4.5
billion, according to an average of 11 analyst estimates
compiled by Refinitiv.
($1=1.3781 Singapore dollars)
($1=7.8495 Hong Kong dollars)
(Reporting by Jamie Freed in Sydney and Farah Master in Hong
Kong; additional reporting by Donny Kwok in Hong Kong; Editing
by Gerry Doyle and Clarence Fernandez)