Quarantine will burn fresh $400m hole, warns Cathay
Embattled Cathay Pacific Airways (0293) warned that new social distancing measures requiring a two-week quarantine for pilots and cabin crew will increase its cash burn by about HK$300 million to HK$400 million per month, on top of current HK$1 billion to HK$1.5 billion levels. The measure may...
Avery Chen and Reuters
Tuesday, January 26, 2021
Embattled Cathay Pacific Airways (0293) warned that new social distancing measures requiring a two-week quarantine for pilots and cabin crew will increase its cash burn by about HK$300 million to HK$400 million per month, on top of current HK$1 billion to HK$1.5 billion levels.
The measure may result in a reduction of around 60 percent to current passenger capacity and a reduction of around 25 percent to current cargo capacity, the airline said.
"The new measure will have a significant impact on our ability to service our passenger and cargo markets," said chief customer and commercial officer Ronald Lam.
The SAR government will implement a new 14-day hotel quarantine, with a 7-day medical surveillance requirement for both Hong Kong-based pilots and cabin crew, effective within February.
The airline, in an internal memo seen by Reuters, requested for volunteers among its crew who could fly for three weeks, followed by two weeks of quarantine and 14 days free of duty, adding it will be a temporary measure and not all its flight will require such an operation.
"We continue to engage with key stakeholders in the Hong Kong government," the memo said.
In an emailed response to Reuters, a Hong Kong government spokesperson said: "In the light of the evolving pandemic situation locally and internationally, the Government will keep reviewing and refining the arrangements applicable to different categories of exempted persons, including air crew, with reference to all relevant considerations."
Last month, Cathay Pacific carried a total of 39,989 passengers, a fall of 98.7 percent year-on-year, while capacity, measured in available seat kilometers, fell by 91.2 percent.
Cargo carriage dropped 32.3 percent to 120,218 tonnes last month. Capacity, measured in available freight tonne kilometers, dropped 36.9 percent.
In 2020, passenger numbers fell 86.9 percent against a 78.8 percent decrease in capacity from a year ago. The tonnage carried by Cathay Pacific and Cathay Dragon fell by 34.1 percent against a 35.5 percent drop in capacity.