Cathay gets a helping hand on funding

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Cathay Pacific HK by Matt Driskill
(PHOTO: Matt Driskill)

https://bit.ly/3sXqtCzCathay Pacific said it will be able to access HK$7.8 billion in a government loan facility for a further 12 months until 8 June 2023 after the city’s government extended the terms. The government provided the bridge loan facility to Cathay Pacific as part of the HK$39 billion recapitalisation announced on 9 June 2020 to help the airline maintain its competitiveness and operations amid the industry-wide downturn due to COVID-19. 2 

Cathay Pacific Group CEO Augustus Tang. (PHOTO: Cathay Pacific)

Chief Executive Officer Augustus Tang said: “We are grateful to the Hong Kong SAR government for its ongoing support, and its continued confidence in the long-term future of Cathay Pacific despite the short-term challenges of the pandemic. Since the beginning of the COVID-19 crisis, we have remained focused on prudent cash management. Despite the difficult operational environment, we have not had to draw down the facility over the past 12 months. The further extension of the drawdown period is greatly appreciated and will provide us with flexibility to manage our liquidity position.” 

The Cathay Pacific Group’s liquidity stood at HK$30.3 billion as of the end of 2021, compared to HK$28.6 billion at the end of 2020. Following the recent adjustments to the government’s travel restrictions and quarantine requirements, the airline said it is progressively adding back capacity. The airline said it was targeting to reduce operating cash burn to less than HK$0.5 billion per month for the next few months. 

“The unprecedented impact of the pandemic has necessitated some very difficult decisions, namely our restructuring in 2020, but through this and our recapitalisation, we have created a more efficient, more competitive and more focused business,” Tang said. “We have already recommenced hiring as we plan for the anticipated recovery in Hong Kong and global aviation in the 18-24 month period ahead. As the Hong Kong’s home airline, we remain resolutely committed to keeping the Hong Kong hub safely and reliably connected just as we have for more than 75 years.”

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