Editorial | A possible new rival adds to the stormy skies ahead for Cathay Pacific
- After recording the worst loss in its corporate history, the flagship carrier will have to step up its game if it wants to survive and prosper after the pandemic, especially with what may be the city’s fifth passenger airline on the horizon
The bad news for Cathay Pacific is that it has just recorded its worst loss – HK$9.9 billion – in its corporate history. The good news is, if you can call it that, the half-year loss has already been priced into its stock. Investors, the experienced ones anyway, are looking ahead to recovery.
But when? That’s the billion-dollar question. Chairman Patrick Healy warned the second half of the year could be equally challenging, because of the pandemic and geopolitical tensions.
Don’t blame him, in other words.
Investors’ patience will, no doubt, be tested. On the other hand, considering the entire global airline industry was within a hair’s width from collapse, Cathay’s current share price after the Hong Kong government’s bailout may be worth a gamble for punters.
The headline loss of HK$9.9 billion was hardly a surprise as the airline had issued a profit warning about a month ago to prepare for market reaction. As expected, cargo services performed better than passenger traffic, which has practically collapsed due to the Covid-19 pandemic.
Something nice, though, can be said about Cathay. It is that it has focused on cutting costs rather than laying off staff in these difficult times. Being paid less is still better than not having a job at all.
