Etihad And Cathay Pacific Record Decreases In Losses For First Half Of Year
Etihad Airways and Cathay Pacific Airways have recorded decreases in their losses for the first half of the year.
Etihad Halves Half-Year Loss To $400m
Abu Dhabi's Etihad Airways has said that its core operating losses halved in the first half of the year to $400 million and that its liquidity position had returned to pre-COVID-19 pandemic levels.
The state-owned carrier, which over the past year has accelerated a pre-pandemic restructuring, said that it cut its operating costs by 27% to $1.4 billion in the first half.
That was helped by a nearly 40% reduction in the number of aircraft utilised with the airline having grounded aircraft, including its ten Airbus A380 superjumbos. It is also phasing out of its 19 Boeing 777-300s.
The airline, which had 64 aircraft in operation in the first half, carried one million passengers, down 71.5% from a year ago. The average number of seats filled fell to 24.9%, from 71%.
Operating revenue shrank 29.5% to $1.2 billion, while earnings before interest, taxes, depreciation and amortisation swung to $100 million from a $100 million loss the year before.
Etihad has operated under tougher restrictions than some other United Arab Emirates carriers since the country lifted a months-long ban on most international travel in the second half of 2020.
Abu Dhabi, the largest emirate and capital of the UAE, currently requires most international arrivals to quarantine for several days while only those from select destinations are exempt.
In neighbouring Dubai, where airline Emirates is based, most international arrivals are required to present a negative coronavirus polymerase chain reaction (PCR) test without having to quarantine.
Cathay Pacific's Loss Shrinks In First Half
Hong Kong's Cathay Pacific Airways Ltd has said that its first-half loss shrank by nearly a quarter, helped by a drastic reduction in headcount and strong air cargo demand.
But Cathay, which lacks a domestic market, remains badly hit by pandemic-related border closures, with passenger revenue plunging 93% during the first six months of the year.
The lag in Hong Kong's travel recovery also means the airline is at risk of losing some prized airport slots in places like the United States and Europe under "use it or lose it" rules.
"This continues to be our toughest period in our history," Cathay Pacific chief financial officer Rebecca Sharpe told analysts.
It posted a net loss of HK$7.57 billion ($973 million), in line with the company's guidance that it would be somewhat smaller than the prior year.
That included HK$500 million of impairment charges mainly related to 11 grounded planes which are unlikely to return to service as well as HK$403 million of restructuring costs.
In one bright spot for the airline, it said that demand for air cargo, which saw yields surge 24% and accounted for 80% of all revenue, was expected to continue to be robust.
Shares in Cathay extended gains after the news to trade 3.7% higher, with Jefferies analyst Andrew Lee saying that cargo revenue was better than expected.
The airline has forecast monthly cash burn falling in the second half and capacity rising to as much as 30% of pre-COVID levels in the fourth quarter, but Sharpe said that hinges on quarantine rules for passengers and crew being relaxed.
Last year, the airline last year cut costs with the loss of 5,900 jobs and also ended its regional Cathay Dragon brand.
Remaining pilots and cabin crew based in Hong Kong have been told they must be vaccinated by August 31 or risk losing their jobs. The airline said that 99% of pilots and 91% of cabin crew had booked or received vaccinations.