Cathay Pacific’s liquidity strong, Omicron impact unclearw

Hong Kong’s Cathay Pacific Airways Ltd (0293.HK) has maintained a strong liquidity position at a time when the impact of the Omicron variant of COVID-19 on travel demand remains unclear, a senior executive said on Wednesday.

The airline said its liquidity of HK$31.7 billion ($4.07 billion) as of Oct. 31 was only slightly down on HK$32.8 billion at June 30 due largely to a strong performance in the air cargo business.

“It is too early to assess the impact on travel demand,” Cathay Chief Customer and Commercial Officer Ronald Lam said of the Omicron variant in an analysts’ briefing.

Cathay last month said it expected its second-half results to improve considerably from the first half, though it still forecast a substantial loss for the full year.

The airline continues to suffer from COVID-19 pandemic-related travel restrictions, operating at only 10% of pre-pandemic passenger capacity in October and posting a 97.2% decline in passenger numbers from 2019.

Cathay last week switched some inbound passenger flights for December to cargo only after not enough pilots volunteered to fly rosters to high-risk destinations that involve five weeks locked in hotel rooms.

Hong Kong this week added countries including Australia, Canada, Germany and Israel to the list of high-risk destinations as it pursues a zero-COVID strategy that it hopes will lead to a border opening with mainland China.

Lam said it was too early to provide a capacity outlook for the first quarter of 2022.

“We do have hope that sometime in 2022 the Chinese mainland government and Hong Kong government may consider opening up,” he said of international travel.

However, John Grant, chief analyst at travel firm OAG, said Hong Kong’s growing alignment with the Chinese mainland border policy meant the financial centre was unlikely to recover its status as a major transit hub anytime soon.

($1 = 7.7955 Hong Kong dollars)

Jamie Freed and Stella Qiu  www.reuters.com