Due to cost-cutting initiatives and robust air cargo demand, Cathay Pacific Airways reported an annual loss of HK $5.5 billion (US $703.45 million) on Wednesday, down from HK $21.65 billion the previous year. After reporting positive cash flow generation in the second half, the airline forecasted a 2021 annual loss of HK $5.6 billion to HK $6.1 billion in January.
In 2021, the loss includes HK $832 million in impairment and related charges, primarily relating to 12 aircraft that are unlikely to re-enter meaningful economic service before retiring or being returned to lessors, HK $385 million in restructuring costs, and a HK $210 million gain on the dilution of an associate interest in Air China Cargo. This compares to HK $4 billion in impairment and related charges for 34 aircraft (and certain airline service subsidiaries’ assets) in 2020, as well as HK $2.38 billion in restructuring expenditures. After adjusting for these extraordinary factors, the Cathay Pacific Group’s attributable loss for 2021 was HK $4.520 billion, down from HK $15.209 billion in 2020, while Cathay Pacific’s loss was HK $776 million, down from HK $12.195 billion in 2020.
In its results statement, Cathay claimed that when comparing 2021 to 2020 as a whole, 2021’s operating performance was typically weaker, owing in part to the first two months of 2020 being relatively robust ahead of the full impact of COVID-19. Passenger revenue fell by 61.6 percent in 2021, to HK $4,346 million, compared to 2020.Revenue passenger kilometres (RPK) decreased by 79.5 percent.The available seat kilometers (ASK) have fallen by 61.8 percent.The airline carried 717,000 passengers, or 1,965 passengers per day on average, a decrease of 84.5 percent from 2020.The passenger load factor in 2020 was 31.1 percent, down from 58 percent in 2015.
Cathay Pacific’s cargo division did extraordinarily well. Cargo revenue in 2021 is expected to be HK $32.377 billion, a 31.8 percent increase over the previous year. The number of revenue tonne kilometers (RFTK) for cargo has fallen by 1.1%.Capacity, as measured by available cargo tonne kilometers (AFTK), fell by 10.9 percent.The load factor increased by 8.1 percentage points to 81.4 percent.The yield increased by 33.1 percent to HK $3.94.
In the second half of the year, cargo demand increased ahead of the regular high season. Cathay Pacific claimed it ran its freighter fleet at maximum capacity in the months running up to the end of 2021, supplementing cargo capacity with additional cargo-only passenger flight operations. Six of the carrier’s Boeing 777-300ER passenger planes were partially transformed into ” preighters” by removing some of the seats in the passenger cabins to increase cargo carrying capacity. The aircraft handled more than 136,000 tonnes of cargo in October, the most it has carried in a single month since COVID-19 began.
