MIAMI – The COVID-19 pandemic added to the difficult situation in Hong Kong, causing Cathay Pacific (CX) a major loss of €2.34bn in 2020.

Harsh travel restrictions and the inability for CX to operate domestic flights led to the carrier becoming crippled. CX indicated in its annual report on 10 March 2021 that its financial losses were reduced by the end of last year before new losses were increased due to new travel restrictions.

The turnover for CX dropped significantly from 56.1% to HK $46.93 billion (approximately EUR 5 billion), and in particular passenger sales fell by 86.9%. The losses were HK $21.6bn (€2.34bn), compared to a profit of $1.69bn in 2019.

The loss in 2020 has been balanced by the financial support of HK $2.69m by the government grants in an effort to quell the damage of COVID-19 on the aviation industry.

This involves HK$4.05bn for 34 aircraft “that are unlikely to resume substantial economic services before their retirement or that are returned to the lenders and several airlines.” 92 of the airline’s passenger aircraft are in extended storage or 46% of their fleet.

CATHAY PACIFIC B-KQL BOEING 777-367(ER). Photo: Liam Funnell/Airways

2020 Recapitalization

In June 2020, CX announced that HK $39.0bn would be recapitalized, but in October presented the “extremely difficult but necessary” restructuring, which unfortunately resulted in the loss of some 8500 jobs and the reintegration of Cathay Dragon into Cathay Pacific.

It introduced new conditions of work for its crew from Hong Kong which was welcomed by 98.5% of pilots and 91.6% of stewards and flight attendants and every employee would have to take a third unpaid leave (a principle approved by 80% of the workforce).

Cathay Pacific’s accounts have seen freight as having higher filling prices and yields (even though revenues declined by 26.5 percent per tonne of kilometers). In 2020, freight sales stood at $HK 24.573m, a rise of 16.2% over the previous year, representing “the market imbalance of demand and available capacity.”

The airline has expanded its capacity with the charter of its complete Air Hong Kong cargo subsidiary, service of cargo-only passenger aircraft, and with the transport of selected goods in some aircraft’s passenger cabins or with the elimination of Economy class seats in four Boeing 777-300ERs.

Cathay Pacific Cargo B-LJE Boeing 747-867F. Photo: Lorenzo Giaccobo/Airways

Cathay Pacific on Vaccine Deliveries

The company also sent the first batch of Fosun Pharma/BioNTech vaccines from Frankfurt on 27 February 2021 to Hong Kong. To satisfy the requirement of this product, the company was able to use its long-standing experience in the transport of pharmaceutical products and the cold chain.

Cathay Pacific Cargo’s director, Tom Owen, reported in a press release, “There are varying demands on all vaccinations. The frozen transport of the Fosun Pharma/BioNTech vaccine could require more specific transport and storage solutions. Our Vaccine Solution has proved to be perfectly suited with our fleet of cargo in particular to the quick delivery of vaccines and other vaccines around the world” The company has already brought a freight fromFosun Pharma/BioNTech to Penang, Malaysia in one of its freight aircraft.”

Cathay Pacific imported the first vaccines to be used in its hometown in Hong Kong, on 19 February. To sustain the vaccine between 2°C and 8°C at a stable temperature, six Envirotainer RAP e2 containers carried a million doses of the Sinovac vaccine.

It was carried in an Airbus A330 that was operated on a scheduled passenger flight CX391. Tom Owen added, “Our new Ultra Track Service, a new generation monitoring and location system that tracks information, such as temperature, GPS positions, and humidity with low-energy Bluetooth drives, was used in this operation for the first time, as part of our Vaccines Solution.”

He also added that “200,000 doses of Sinovac vaccine were also delivered in Mexico on the same trip. A heat trolley was connected to the only Envirotainer rap 2 container that had been transported in a cold chamber set between 15°C and 25°C to the Cathay Pacific freight station. It was recharged on a Boeing 747-8F cargo on flight CX086 before its flight to Mexico City via Anchorage”

This week Tuesday, the airline reported there would be an additional 800,000 doses towards Mexico. Cathay Pacific transported CanSinoBIO vaccines to Mexico via Beijing and Hong Kong in early February.

Featured image: Cathay Pacific B-KPE Boeing 777-367(ER). Photo: Brandon Farris/Airways