|For Immediate Release||7 June 2022|
extension of HK$7.8 billion bridge loan
from the Hong Kong SAR Government
connectivity at the Hong Kong hub
Cathay Pacific welcomes the Hong Kong SAR Government's agreement to extend the drawdown period of the HK$7.8 billion loan facility for a further 12 months until 8 June 2023. The Government provided the bridge loan facility to Cathay Pacific as part of the HK$39 billion recapitalisation announced on 9 June 2020 to help the airline maintain its competitiveness and operations amid the industry-wide downturn due to COVID-19.
Chief Executive Officer Augustus Tang said: "We are grateful to the Hong Kong SAR Government for its ongoing support, and its continued confidence in the long-term future of Cathay Pacific despite the short-term challenges of the pandemic. Since the beginning of the COVID-19 crisis, we have remained focused on prudent cash management. Despite the difficult operational environment, we have not had to draw down the facility over the past 12 months. The further extension of the drawdown period is greatly appreciated and will provide us with flexibility to manage our liquidity position."
The Cathay Pacific Group's liquidity remains at a healthy level, standing at HK$30.3 billion as of the end of 2021, compared to HK$28.6 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 HK$0.5 billion per month for the next few months.
Mr 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. As the Hong Kong's home airline, we remain resolutely committed to keeping the Hong Kong hub safely and reliably connected just as we have for more than 75 years."