To Keep Reading
Shares of Hong Kong’s flagship carrier, Cathay Pacific Airways Ltd (SEHK: 293), have had a rough time of it recently. It’s been a far cry from the early part of 2019 when the airline’s shares were buoyed by news that it reported a full-year profit for the first time in three years – posting a 2018 profit of HK$2.34 billion (US$293 million).
However, the recent anti-government protests that hit Hong Kong international airport in early August, causing hundreds of flights to be cancelled, were further compounded by news that Mainland Chinese authorities were banning staff Cathay aircrew on China flight routes. As you can see below, shares in Cathay fell over 20% from mid-July and hit a nadir on 13 August (and has underperformed an already poorly-performing Hang Seng Index by quite a margin).
Some respite for its stock was offered after Cathay CEO Rupert Hogg and Chief Customer and Commercial Officer Paul Loo resigned. But with Cathay’s forward bookings in August already suffering a fall on protests, the US-China trade war impacting its cargo arm and as Chinese carriers try to poach business customers who tend to travel through Hong Kong, could the airline be heading for a full-year loss in 2019?
Source: CapIQ as of 29 August 2019
The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Hong Kong contributor Tim Phillips doesn't own shares in any companies mentioned.