Cathay’s CEO wants to turn the airline back to profitability, but faces manpower constraints

Cathay Pacific hopes to be profitable again in 2023, but returning to its pre-pandemic capacity remains one of the airline’s “biggest risks,” its CEO said. The capacity to operate at a profitable level depends on numerous factors, including “how full the flights might be, the yield we can generate on our flights,” CE Ronald Lam said Tuesday. “But I’m hopeful that this year we can turn around the business and be back in profit overall.” Last week, Hong Kong’s flagship carrier reported an annual loss of HK$6.55b ($834.9m) for the year ended December 2022, recording an 18.5% increase in losses from 2021. However, the airline swung to an annual operating profit of HK$3.5b last year — the first since 2019, according to Refinitiv data. “We are currently supply constrained mainly by the manpower, not just of our company, but the whole ecosystem within the aviation industry,” said Lam, who took the helm as CEO in January. “We need to have manpower in the air manpower on the ground. We also need the airport workers to be ready to take on flights both in Hong Kong and overseas.” The International Civil Aviation Organization expects a return in global air passenger demand to pre-pandemic levels by the end of March this year, and predicted that demand for global air travel could be 3% stronger than 2019′s figures by year end. The Hong Kong carrier said in its earnings report last week that due to manpower limits, it will only be able to fully meet pre-pandemic passenger flight capacity by the end of 2024. As of December, the group was “operating about one-third of pre-pandemic passenger flight capacity,” the report said. “Our projection is 70% passenger flight capacity by the end of this year,” Lam said.<br/>