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Cathay Pacific gets a $5 billion Government bailout

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You have to feel for Cathay Pacific, which has been down in the doldrums for some time now. The airline was already facing difficulties before coronavirus as a consequence of reduced demand due to the Hong Kong protests.

Coronavirus appears to be the straw that broke the camel’s back. In April and May, Cathay Pacific operated at 4% of its normal capacity. Whilst these cuts have managed to stem the tide of losses, it is still in a difficult position.

Cathay A350-900

The Financial Times is now reporting that the airline has taken a bailout from the Hong Kong government for US$5bn. The government will take a 6.1% stake in the airline with Swire Pacific as the controlling shareholder. Air China and Qatar Airways will also see their stakes diluted.

The HK government will also be able to place two ‘observers’ in board meetings and with access to management information. Given the existing tensions between Hong Kong this may be a tough pill to swallow, especially after former Cathay Pacific CEO ‘resigned’ last year after pressure from Beijing.

It doesn’t look like the airline had much choice, however. Patrick Healy, chairman of the airline said that “quite frankly without this plan the alternative would have been a collapse of the company”.


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Comments (15)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • BrightonReader says:

    Teesside please.

    Though you get it right in the next paragraph. Then get it wrong again the very next sentence.

    I’m originally from Teesside and it’s blooming irritating when it gets spelt incorrectly!

    Anyway good news more flights are operating from MME.

    just need a more than once a week train and a proper bus service to Stockton and Darlington and the rest of the Tees Valley.

    • Rhys says:

      Sorry!

    • Heathrow Flyer says:

      I hate to say this but these new Teesside routes will be dead in the water before the year’s out.

      Even pre-COVID they were marginal at best. Fair play to Ben Houchen for trying, however.

  • Yorkieflyer says:

    I wonder whether the new MME -ALC route will start up?

  • Stu N says:

    Sad times for Cathay. I have a particular fondness for them as flying Cathay First from Haneda to Hong Kong is the highlight of my flying career so far. I hope they come out the other side of their crises as the same airline.

    • Simon says:

      Ditto. It was on the upper deck of a Cathay Jumbo from Tokyo to Hong Kong that I realised nothing in the career I was then in would ever match the contentment I was feeling and I needed to change jobs.
      I nowadays have no international travel in my life but don’t drag myself to work in the morning.

  • Marcw says:

    Get the maths right first: an extra 30% value of the voucher is NOT equivalent to 30% off. it’s more of a 23% off.

  • Rob says:

    Yes, this is a good one. We’ll cut and paste the article from last year over the next couple of days 🙂

  • Rob says:

    Given that you’ve been given a 6 month extension and BA has only really been suspended for 4-5 months – assuming there is a July schedule – I can’t see further extensions.

  • BP says:

    Anantara really annoyed me 8 years ago when I stayed at the Koh Phangan resort. As a couple in our 20s they wanted to take our photo so that the staff knew we were paying guests. Ridiculous. We had booked the 2nd highest room category, the beachfront pool suite. It was as if people in their 20s shouldn’t be staying there. Put me off the brand for life.

  • Anna says:

    I think you’re asking if you’re next 2 4 1 will have 6 months longer on it if you hit your £10k BAPP spend by the end of June, my understanding is that yes it will.

This article is closed to new comments. Feel free to ask your question in the HfP forums.

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