Cathay Pacific shareholders approve government-led bailout

Shareholders of Cathay Pacific have overwhelmingly approved a government-led $5b bailout of the airline, but the carrier still faces strong headwinds with its operating base of Hong Kong facing a resurgence of COVID-19 cases. The package of equity and debt support worth HK$39b from the city's government and the carrier's major shareholders will provide a breather for the ailing airline. Cathay has been hit hard by the coronavirus pandemic on the heels of months of antigovernment protests in Hong Kong last year. But Monday's vote comes amid dimming short-term prospects for a relaxation of Hong Kong's controls on inbound travel or of the restrictions imposed by the governments of key destinations the airline flies to. "We expect a deeper revenue decline and net loss due to the halt in international flights and jet fuel hedging loss, despite several rounds of staff voluntary unpaid leave," said Kelvin Lau, aviation analyst at Daiwa Capital Markets in Hong Kong, in a note on Friday. Lau expects the airline to record a net loss of more than HK$8b for H1. The airline announced on Monday evening that all five resolutions presented by the company passed with more than 99% support from shareholders. The result was widely expected. <br/>