Cathay Pacific Airways, a Hong Kong airline, lost up to $2.8 billion in 2020. The airline's loss has been attributed to the effect of the coronavirus pandemic on the travel industry and the airline's restructuring efforts.
The loss is not unexpected. The airline had warned investors that it's Q3-Q4 losses would be higher than the $1.3bn it suffered in Q1-Q2. Its current loss is a sharp detour from the $220 million profit the airline made in 2019.
Cathay Pacific closed down a subsidiary of the airline
Late last year, Cathay Pacific decided to shut down a subsidiary of the airline known as Cathay Dragon. Cathay Dragon was a regional plane that flew to mainland China and other Asian countries. Cathay Dragon's routes were replaced by Cathay Pacific and its budget carrier Hong Kong Express.
The airline also announced that it was reducing up to 8500 jobs. A quarter of those jobs were already in dire straits before the announcement due to a pause in hiring new staff and the closure of some of the airline's overseas ventures. The decision to cut down jobs was scrutinized because the airline was given a $5bn bailout from the Hong Kong government.
The cargo section of the airline had the best performance in 2020
According to data released by the company, the cargo subsidiary brought in the most profit for the airline in 2020. The cargo operation also suffered a reduction in value because the subsidiary is tied to the airline's passenger flight. The airline is confident that the vaccine rollout and the current quarantine measures in Hong Kong will improve operations very soon.
According to Cathay's chairman, the company remains optimistic for the future even though the current outlook is discouraging. He added that the company was confident in its capability to bounce back from its losses. The International Air Transport Association (IATA) said that air travel won’t return to normal until 2024.