Government will own stake in carrier, already weakened by drop in travel due to 2019 protests >>
by: Harvey Chipkin
Hong Kong’s government will provide Cathay Pacific with $3.5 billion in state aid, part of a $5 billion recapitalization plan for the airline. The state will buy $2.5 billion in Cathay Pacific shares and provide the carrier with a $1 billion bridge loan. Also, existing shareholders will infuse $1.5 billion into the company. Cathay’s three largest shareholders are Swire Pacific, Air China and Qatar Airways. The carrier entered the COVID-19 crisis already weakened by the sharp drop in Hong Kong travel in the second half of 2019 because pro-democracy protests suppressed demand. The airline expects that because its entire route network is international, recovery will be slow. Patrick Healy, chairman, said the infusion of new capital “does not mean we can relax, quite the opposite.” He said the company must “redouble its efforts to transform its business in order to become more competitive.”
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