Cathay Pacific warns global tensions will compound virus woes

Cathay Pacific has warned that rising geopolitical tensions and a global recession are likely to compound the pressures from coronavirus that drove the Hong Kong airline to a record loss. The company said on Wednesday that lost HK$9.9b ($1.3b) in H1, confirming figures released in a profit warning last month. That compared to a profit of HK$1.3b over the same period last year. Cathay, which unveiled a $5bn government-backed rescue plan in June, added it did not expect a “meaningful recovery” in passenger numbers for some time, citing the impact of global travel restrictions and quarantine measures. “This is the biggest challenge to the aviation industry that Cathay Pacific has ever witnessed,” said Patrick Healy, the carrier’s chairman. “With a global recession looming, and geopolitical tensions intensifying, trade will probably come under significant pressure, and this is expected to have a negative impact on both air travel and cargo demand,” Healy added. The health crisis has piled pressure on Hong Kong’s flag carrier, which was already grappling with fallout from the social unrest that swept across the territory in 2019 and a trade war between the US and China. The cargo business has been a rare bright spot for Cathay this year. Revenues from the division increased 8.8% year on year to HK$11.2b despite a fall in overall tonnes transported, as fewer planes in the air drove up prices.<br/>