Cathay Pacific (HKG Stock): All set to fly again?
|At the start of the year, Cathay Pacific flew to just under 30 destinations. This was down from the 100+ destinations price to the pandemic. However, Cathay Pacific is signaling optimism as they expect to double the current destination list as many Asian countries dial back their Covid restrictions.
Not as bad cash burn as expected
The Hong Kong based carrier now expects the cash burn to drop to less than $64 million a month in the next few months as the Hong Kong Government starts to roll back strict Covid restrictions. Flights from early June now include daily flights to and from London Heathrow and an increase in passenger flights to the US, New Zealand, and Australia. This is important for Cathay Pacific as the airline is wholly dependent on international travel as it has no domestic market.
Flight capacity picks up
The latest passenger figures for May show that total passenger numbers rose 141.5% y/y to around 58K. That is a good sign. Their air freight figures have also stood up in May as Covid restrictions start to ease in Shanghai towards the end of May.
So, does the pick-up in international routes, Shanghai & Beijing re-opening, and improving passenger and freight volumes signal more gains for Cathay Pacific shares? The chart shows major daily support in the region marked. This would provide an obvious area for buyers to step in and lean against. The main risk for buyers would be if Covid cases break out again heavily in China. This could impact the outlook for Cathay Pacific and change the forecast for a gradual reopening of routes over the second half of 2022.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.