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Inside Out | Cathay Pacific is not alone as Covid-19 and Ukraine war push aviation sector into dark, black night
- Hopes of a long-awaited recovery from the Covid-19 depression have been crushed, with the aviation industry again caught in the crossfire
- Rising oil prices, airspace bans and other measures are shaking the industry just as there were signs of light at the end of the tunnel
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Just as you think nothing can get worse, it does. I’m not talking about the Hong Kong government’s management of the Covid-19 pandemic. I’m talking about aviation.
I marvelled last week at the impossibly measured patience of Cathay Pacific as it reported stupendous losses and the depressing absence of light at the end of any tunnel. The melancholic lyrics of the 1968 Beatles ballad Blackbird sprang to mind: “Take these broken wings and learn to fly … into the light of the dark, black night.”
I am impressed and perplexed that after more than two years of extraordinary adversity, Hong Kong’s flag carrier not only manages to survive but is able to maintain a brave face. How many companies do you know of that could survive despite passenger levels falling to just 2 per cent of normal? Thank goodness for air cargo.
Cathay has been forced to dismiss 5,900 staff. It reported losses of HK$5.5 billion (US$702.8 million) in 2021 – welcome only set against the 2020 losses of HK$21.6 billion. It expects monthly losses of HK$1.5 billion until Hong Kong’s quarantine lockdown comes to an end.
Chairman Patrick Healy offers comfort that the airline had HK$30.3 billion in liquidity as of December 31. However, he did not pause to point out that at the current rate of cash burning, all liquidity will be gone by the middle of 2023.
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Hong Kong’s sorry saga of the Cathay Pacific pilots fired after suspected Covid breach in Germany
Hong Kong’s sorry saga of the Cathay Pacific pilots fired after suspected Covid breach in Germany
Then, just as cracks of hope began to appear for improving aviation prospects towards the end of 2022, Russia invaded Ukraine. Thousands of lives have been lost, the peaceful existence of millions of people across Europe has been overturned and fears of global war have awakened.
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