Cathay Pacific to burn cash as crew quarantine rules bite

Hong Kong's Cathay Pacific Airways Ltd said on Monday that it expected to resume burning cash because of stricter crew quarantine measures after flagging a surprise profit in the second half of 2021 due to cost cuts and a strong cargo market. The airline forecast it would post an annual loss of HK$5.6b to HK$6.1b for 2021, well below the average HK$10.2b estimate from 12 analysts polled by Refinitiv and its HK$21.65b loss in 2020. The full-year forecast was also narrower than the first-half loss of HK$7.57b, with Cathay pointing to positive cashflow generation in the second half. However, the airline forecast it would burn through HK$1b to HK$1.5b of cash a month starting in February after the government tightened crew quarantine restrictions, forcing the airline to cut cargo and passenger capacity sharply. Cathay is operating about 2% of its pre-pandemic passenger capacity and about 20% of its pre-pandemic cargo capacity in January. The schedules listed on Cathay's website for February and March appear about as light as January, with only a handful of flights per month to destinations such as London, Sydney and Tokyo that had multiple daily flights before the pandemic. Flights to mainland China are less affected. "Until conditions improve, we are doing everything in our power to maximise capacity, and estimate that mitigation measures to increase crew resources will enable us to operate approximately an additional 5% more cargo flight capacity than we are currently operating," Cathay CE Augustus Tang said. <br/>