On Friday, March 10, 2023, Cathay Pacific announces a net loss for 2022 and it does not seem to be very good. The airlines have been continuing to struggle to recover post-pandemic as Hong Kong’s pandemic measures were so strict.
Cathay Pacific Records HK$6.5 Billion Net Loss For 2022
For the last few years, Cathay was squeezing financially and in addition to the pandemic made the airline nearly go off business. As Reuters reported, the airlines reported a HK$6.5 billion ($834 million) net loss for 2022.
The figures show the airline lost more than the previous year HK$5.5 billion ($700 million). This means even though the pandemic is now almost over and many other airlines are making record profits, Cathay is still not doing well with it.
The airline’s newly appointed CEO, Ronald Lam wants the $6.2 billion airline to hit 70% of pre-pandemic passenger capacity by the end of this year and is targeting a full recovery by next year. He also mentioned:
“It is halfway there: residents are taking holidays and visiting executives are back. It promises a swift reversal on a HK$6.5 billion ($834 million) net loss for 2022 Cathay reported.”
Cathay Pacific Struggling To Recruit Staff
Despite a constant recruitment process, the airline is also struggling to pool the number of staff in the company. While it is planning to hire 3,000 people by the end of 2023, it does not seem to catch the eye of many given the political situation of Hong Kong with China and the cruel laws it had been taking recently.
It has to persuade cabin crews who are laid off or those who ended up owing business will need to be convinced to return with monthly salaries as low as HK$9,100 ($1,146) in one of the most expensive cities in the world.
In order to lure the cabin crews back into the company, the airline also has to deal with the union which is demanding higher wages and improved roster arrangements. Furthermore, the airlines also need to hold back those who are experienced even though it had hired 2,000 new staff last year.
Cathay Pacific’s Market Value Only Increased One-Fifth Over Rivals
On Thursday’s assembly, investors were still concerned about the company’s growth and sold shares down 3.6%. Multiple factors took place in this decision:
- Cathay has roughly 63% of pre-pandemic pilot numbers as of now
- Offering higher salaries would attract more crews but it will be tough for an airline yet to return to profit
- The group is worth 16% less than before the pandemic and its market value increasing merely 7%
Cathay chairman, Patrick Healy said at a briefing:
“By the end of March, as a Group, we will be operating approximately 50% of pre-pandemic passenger flight capacity and serving more than 70 destinations. This will increase to 70% of pre-pandemic levels by the end of 2023, covering more than 80 destinations. And we aim to restore capacity fully to pre-pandemic levels by the end of 2024.”
Cathay is still struggling to get back to earning a profit post-pandemic as they made a net loss of HK$6.5 billion or $834 million in 2022 which is HK$1 billion more than in 2021.
The airline also has a hard time trying to recruit or keep experienced staff, the investors are concerned selling shares down 3.6% on Thursday. Cathay plans to fully recover by 2024, hopefully, the negotiations with the unions go well and it will have profit for next year.