Tag: Jamie Freed

Cathay Pacific Posts Record $1.27 Billion First Half Loss

August 12, 2020 / WIL BALDWIN

Cathay Pacific aircraft are seen parked on the tarmac at the airport, following the outbreak of the new coronavirus, in Hong Kong

SYDNEY (Reuters) – Hong Kong’s Cathay Pacific Airways Ltd reported a record HK$9.87 billion ($1.27 billion) first-half loss and said it did not expect a meaningful recovery in passenger demand for some time due to the coronavirus pandemic.

The figure was in line with the HK$9.9 billion forecast it had flagged last month and included HK$2.47 billion of impairment charges.

Revenue plunged 48.3% to HK$27.7 billion in the six months ended June 30 as it slashed passenger flying to a barebones schedule due to lower demand and border restrictions, though it added more cargo-only flights as freight yields rose 44.1%.

The airline, which received a $5 billion rescue package led by the Hong Kong government, has so far refrained from large-scale job cuts but has warned it is reviewing all aspects of its business model with an update expected by the fourth quarter.

“Inevitably this will involve rationalisation of future planned capacity compared to pre-crisis plans, taking into account the market outlook and cost structure at that time,” Chairman Patrick Healy said in a statement on Wednesday.

It has rearranged its aircraft order book with Airbus SE to delay deliveries, is in advanced talks with Boeing Co to do the same and has begun sending one-third of its fleet outside Hong Kong for storage in less humid conditions.

The airline said last month that it had reduced its monthly cash burn to about HK$1.5 billion from between HK$2.5 billion and HK$3 billion while maintaining a minimal flying schedule.

Cathay is expected to report a full-year loss of around HK$13.6 billion, according to the average of 13 analysts polled by Refinitiv before it released its half-year results.

The airline’s shares had surged 9.3% on Wednesday ahead of the earnings announcement, which was made while trading was suspended for the market’s lunch break.

“It is laggard buying on some traditional economy stocks,” Steven Leung, a sales director at UOB Kay Hian, said of the rise.

($1 = 7.7506 Hong Kong dollars)

(Reporting by Jamie Freed; additional reporting by Donny Kwok in Hong Kong; Editing by Himani Sarkar)

Qantas Pauses Airplane Deliveries from Airbus and Boeing

May 10, 2020 / WIL BALDWIN

Qantas planes are seen at Kingsford Smith International Airport in Sydney, Australia

SYDNEY (Reuters) – Qantas Airways Ltd <QAN.AX> said on Monday it had advised Airbus SE <AIR.PA> and Boeing Co <BA.N> that it did not expect to take delivery of any new planes in the near term as it grapples with a plunge in demand due to the coronavirus pandemic.

The airline had expected to add three Boeing 787-9 jets to its fleet by the end of 2020 and to start taking delivery in August of the first of 18 Airbus A321neos due by 2022.

There is no longer a specific timeline for them to arrive because the market is too uncertain, a Qantas spokesman said, confirming a report on travel website Executive Traveller.

Many carriers around the world have grounded the bulk of their fleets and halted aircraft deliveries in response to the pandemic, leading Airbus and Boeing to cut production rates.

Qantas last week said it had shelved plans to order this year up to 12 A350s capable of the world’s longest commercial flights from Sydney to London. It said it was reviewing its fleet with the expectation that most international travel could take years to rebound.

More than 25,000 of the airline’s staff have been stood down until at least the end of June as the carrier is flying only 5% of its pre-crisis domestic passenger network and 1% of its pre-crisis international network.

An Airbus spokesman said his company did not comment on delivery schedules for airlines. Boeing did not respond immediately to a request for comment.

(Reporting by Jamie Freed; Editing by Himani Sarkar)

CDB Financial Scraps Purchase of 29 Boeing 737 MAX Jets

April 20, 2020 / WIL BALDWIN

SYDNEY (Reuters) – China Development Bank (CDB) Financial Leasing Co said on Monday it had agreed with Boeing Co <BA.N> to cancel the purchase of 29 undelivered 737 MAX jets, adding to a string of recent cancellations of the grounded airplane.

The model has been grounded globally for more than a year following deadly crashes in Indonesia and Ethiopia.

“In light of evolving aviation market dynamics, we’ve been working together with Boeing over many months to re-calibrate our MAX orderbook to be in line with our long-term view of the market and related opportunities,” Xuedong Wang, chairman of CDB Financial unit CDB Aviation, said in a statement.

The lessor said it retained an order for another 70 of the planes that also have yet to be delivered.

Boeing recorded a total of 150 MAX cancellations in March, including 75 from Irish leasing company Avolon. Boeing remains in talks with regulators seeking approval to return the plane to service, but its customers have also seen a sharp fall-off in demand due to the coronavirus pandemic.

Boeing said in a statement it continued to partner with leasing company customers to help them balance their portfolios in a challenging market.

“As we work to return the 737 MAX to service, our focus remains on addressing our customers’ fleet needs while optimising the delivery of the more than 4,000 airplanes in our 737 backlog,” it said.

“As market conditions normalise, Boeing anticipates that lessors who have restructured or reduced their orderbooks will continue to add MAX aircraft to their portfolios through sale leaseback agreements with airlines,” the planemaker said. “Longer term we expect these lessors will again place orders for direct MAX purchases.”

CDB Financial Leasing said that all 737 MAX 10 jets still on order will be switched to the smaller 737 MAX 8 model, and 20 deliveries will be deferred to dates in 2024, 2025 and 2026.

(Reporting by Jamie Freed; additional reporting by David Shepardson in Washington Editing by Tom Hogue and Muralikumar Anantharaman)

Cathay Pacific Posts Record $1.27 Billion First Half Loss

Qantas Pauses Airplane Deliveries from Airbus and Boeing

CDB Financial Scraps Purchase of 29 Boeing 737 MAX Jets

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