Cathay Pacific (CX, Hong Kong International) will have access to a HKD7.8 billion Hong Kong dollar (USD994 million) loan facility for a further 12 months until June 8, 2023, after the Hong Kong-SAR Government decided to extend it for the second time in as many years.

The government provided the bridge loan facility to Cathay Pacific as part of the HKD39 billion (USD4.9 billion) recapitalisation announced on June 9, 2020, following the COVID-19 downturn.

Welcoming the government's decision, Chief Executive Officer Augustus Tang, in a statement, said the flag carrier had not needed to draw on the facility over the past 12 months due to prudent cash management. Still, the extension has given the airline the flexibility to manage its liquidity position.

He said the Cathay Pacific Group’s liquidity remained at a healthy level, standing at HKD30.3 billion (USD3.8 billion) at the end of 2021, compared to HKD28.6 billion (USD3.6 billion) at the end of 2020.

“Following the recent adjustments to the government’s travel restrictions and quarantine requirements, the airline is progressively adding back capacity and we expect this will have a positive impact on the airline’s business.

“We have been evaluating the potential benefit on our operations and cost base. Based on our preliminary assessment, we are targeting to reduce operating cash burn to less than HKD0.5 billion (USD63.7 million) per month for the next few months.”

Tang added: “The unprecedented impact of the pandemic has necessitated some very difficult decisions, namely our restructuring in 2020, but through this and our recapitalisation, we have created a more efficient, more competitive and more focused business. We have already recommenced hiring as we plan for the anticipated recovery in Hong Kong and global aviation in the 18-24 month period ahead.”

Hong Kong on May 1, 2022, began to relax travel and quarantine restrictions after having been effectively closed off from the world for the past two years as it sought to align with China's zero-tolerance COVID-19 travel restrictions.