Hong Kong carrier Cathay Pacific is projected to resume burning cash due to tightened crew quarantine and travel restrictions. Recently, Cathay Pacific’s Chief Executive Officer, Augustus Tang, announced that the airline expects an operating cash burn of HK$1.0-1.5 billion ($130 - $190 million) per month from February.

The home carrier of Hong Kong has announced they are expected to record a loss of approximately HK$5.6-6.1 billion ($720 - $783 million) over the course of this coming year. Strong demand for cargo flights and a reduction in operating expenses have reduced this amount to almost a quarter of the predicted loss of HK$21.6 billion ($2.7 billion).

Tightened measures implemented by the Hong Kong SAR Government in late December and early January have acutely hurt the global financial hub and drastically reduced carrier operations. The new restrictions have been significantly attributed to airline crew members who are facing legal action for breaking quarantine regulations and introducing the Omicron variant of COVID-19 to the region.

New quarantine and travel restrictions

The Hong Kong SAR Government has announced the compulsory quarantine period for inbound travelers from overseas destinations will be reduced from 21 to 14 days from February 5th. Inbound travelers, including vaccinated Hong Kong residents, must still stay in designated quarantine hotels and complete a further seven-day self-monitoring period.

Route connectivity among historically strong destinations has also taken a significant hit. Simple Flying previously reported the oneworld founding member is operating just 20% of its pre-pandemic cargo capacity and 2% of its pre-pandemic passenger capacity. Although passenger flights to the Chinese mainland will remain largely unaffected, much of the Cathay Pacific network has seen a drastic reduction in response to the latest Government measures.

Additionally, flights from eight nations (Australia, Canada, France, India, Pakistan, the Philippines, the United Kingdom, and the United States of America) remain prohibited from landing in Hong Kong through at least February 18th. A Government spokesman said of the place-specific flight suspension mechanisms,

“We must act decisively to lower the risk to the local epidemic situation to quickly quell the epidemic situation, such that it would not be necessary to maintain the most stringent prevention and control measures for a long time."

Increased cargo operations

The airline has responded by maximizing cargo capacity across its network to offset the reduction in passenger flights. Freighter operations to the Chinese mainland and regional destinations are still operating, as is a daily service to North America, alongside a number of cargo-only passenger aircraft destined for Europe.

One of the highlights of the increased cargo capacity was the distribution of vaccines across the network. Mr. Tang continues,

“Despite quarantine restrictions and operational challenges, Cathay Pacific surpassed the milestone of 120 million COVID-19 vaccines carried in 2021. We carried more than 13.3 million doses in a single day. As a group, our airlines have carried more than 165 million doses of different COVID-19 vaccines around the world since the pandemic began".

While passenger flights remain at just a fraction of their 2019 levels, the airline remains firmly committed to keeping the city connected safely with the world and maximizing capacity where possible.