PHOTO: Cathay Pacific.

LONDON – One year on since the resignation of Cathay Pacific (CX) CEO Rupert Hogg, there is still a long road ahead for the airline.

Within that 12-month period, the airline has struggled considerably, as it battles other issues away from the COVID-19 pandemic.

Photo: Bloomberg Business

Hogg Resignation


The resignation of Hogg came following mounting Chinese regulatory scrutiny over the involvement of the carrier’s staff in the anti-government protests last year.

At the time, the scandal came after Beijing censured some of Cathay Pacific’s staff over being vocal supporters of the pro-democracy rallies in the city.

Flights resumed from Hong Kong around two days later as police were able to clear protesters from Hong Kong Airport (HKG).

Because of this, Chinese state-owned companies embarked on a boycott campaign against the Hong Kong-based airline, asking all employees not to fly with CX.

COVID-19 Woes


As soon as the COVID-19 pandemic hit, the airline took measures to save costs. This included the delaying of aircraft orders and cutting capacity.

Cathay Pacific also had to cease certain operations within the Americas, which resulted in Vancouver-based cabin crew laid off.

Back in April, the airline was only operating services twice-weekly to the United States.

This was because of an internal memo released stating that it was no longer viable to keep bases in New York, San Francisco and Los Angeles open.

By July, the airline had issued profit warnings, due to a strong decline in traffic by 99.1% for June 2020 compared to the same period last year.

And such profit warnings had appeared to be true, with the airline announcing a HK$9,865m loss in profit around three days ago.

Continued losses have resulted in a HK$39bn recapitalisation plan, which was agreed and concluded on August 12.

Cathay Pacific Airbus A330-300; B-HLJ. Photo: Aero Icarus from Zürich, Switzerland

Ongoing Political Unrest


Even one year on, the protests in Hong Kong are still continuing, causing further political unrest in the region.

The security law that was passed in the country caused conflict because of it being seen as “China stepping in to ensure the city has a legal framework to deal with what it sees as serious challenges to its authority”.

But because some elements of the law offers more influence for Beijing in Hong Kong, this is why people have been taking to the streets.

In the context of CX, the political unrest could be very dangerous to its HKG hub. Passengers and consumers may not feel safe enough to transit through the airport.

This could mean alternate arrangements by fliers to go through the likes of Dubai (DXB), Doha (DOH), Abu Dhabi (AUH) or Singapore (SIN) etc.

Cathay Pacific Airbus A350-1000 taxing at Toulouse Airport (TLS). Photo: Clement Alloing.

Long Road Ahead


Whilst it is a long road ahead for the airline, it most certainly has been dealt a pair of difficult cards to use.

Because of the continued existing political unrest, an end needs to be in some level of sight for CX to fight that fire.

Recapitalization


With European Airports to Chief Executive Officers of major airline conglomerates stating a 2024 recovery, the recapitalisation plan could not have come at a better time.

The recapitalization plan will ensure short-term survival, but Cathay Pacific has to now consider how it will approach the industry.

After all, it will be significantly volatile, even in the recovery years too, as COVID-19 will change the way air travel is conducted for the future.


Featured Image: Cathay Pacific Airbus A350. Photo Credit: Cathay Pacific.

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