Cathay Pacific Airways (0293) says it welcomes the Hong Kong government's agreement to extend the drawdown period of the HK$7.8 billion loan for a further 12 months until June 8 next year.
The government provided the bridge loan to Cathay as part of the HK$39 billion recapitalization announced on June 9, 2020, to help the airline maintain its competitiveness and operations amid the industry-wide downturn due to the Covid pandemic.
The further extension of the drawdown period is greatly appreciated and will provide Cathay with the flexibility to manage its liquidity position, said chief executive Augustus Tang Kin-wing.
Despite the difficult operational environment amid Covid, the airline has not had to draw down the facility over the past 12 months, Tang said.
Following the recent adjustments to the government's travel restrictions and quarantine requirements, Cathay is progressively adding back capacity and has been evaluating the potential benefit on its operations and cost base, Tang said.
Based on its preliminary assessment, the airline is aiming to reduce operating cash burn to less than HK$500 million a month for the next few months, Tang said.
The airline had already restarted hiring as it planned for the anticipated recovery in Hong Kong and global aviation in the next 18 to 24 months.
Cathay has not had to draw down the facility over the past 12 months. REUTERS
