Cathay's CEO wants to turn the airline back to profitability, but faces manpower constraints

Cathay Pacific hopes to beryllium profitable again successful 2023, but returning to its pre-pandemic capableness remains 1 of the airline's "biggest risks," its CEO told CNBC.

The capableness to run astatine a profitable level depends connected galore factors, including "how afloat the flights mightiness be, the output we tin make connected our flights," Chief Executive Ronald Lam told CNBC's Emily Tan Tuesday.

"But I'm hopeful that this twelvemonth we tin crook astir the concern and beryllium backmost successful nett overall."

Last week, Hong Kong's flagship carrier reported an yearly nonaccomplishment of HK$6.55 billion ($834.9 million) for the twelvemonth ended December 2022, signaling an 18.5% summation successful losses from 2021.

However, the hose swung to an yearly operating nett of HK$3.5 cardinal past twelvemonth — the archetypal since 2019, according to Refinitiv data.

"We are presently proviso constrained chiefly by the manpower, not conscionable of our company, but the full ecosystem wrong the aviation industry," said Lam, who took the helm arsenic CEO successful January.

"We request to person manpower successful the aerial manpower connected the ground. We besides request the airdrome workers to beryllium acceptable to instrumentality connected flights some successful Hong Kong and overseas."

The International Civil Aviation Organization expects a instrumentality successful planetary aerial rider demand to pre-pandemic levels by the extremity of March this year, and predicted that request for planetary aerial question could beryllium 3% stronger than 2019's figures by twelvemonth end.

The Hong Kong bearer said successful its net study past week that owed to manpower limits, it volition lone beryllium capable to afloat conscionable pre-pandemic rider formation capableness by the extremity of 2024.

As of December, the radical was "operating astir one-third of pre-pandemic rider formation capacity," the study said.

"Our projection is 70% rider formation capableness by the extremity of this year," Lam told CNBC.

"It's chiefly driven by whether we tin assemble each the indispensable resourcing that we request crossed the full system. So far, we are connected way ... we are already astatine 50% and we're moving precise hard towards 70% by the extremity of this year."

Lam, however, pointed retired that Cathay's concern was antithetic from astir different airlines.

For one, Hong Kong aerial unit was subjected to the "most stringent quarantine conditions successful the full world," helium said.

Hong Kong lone started lifting its choky Covid regulations precocious past year, overmuch aboriginal than the remainder of the world.

"Therefore, for a agelong clip we were operating astatine precise debased capableness from the pandemic. So overmuch truthful that the licence of galore of our pilots really person expired," helium said, adding that the bearer had to allocate clip and resources to retrain its pilots.

"In presumption of our biggest risks, I volition accidental it's to physique our capacity, whether we're going to get capable resources successful the full aviation ecosystem," helium said. "We'll beryllium moving precise hard to code that truthful that we tin we physique backmost to our pre-pandemic capableness arsenic soon arsenic possible."

Asked if the institution volition beryllium paying dividends to mean shareholders this year, helium replied: "Not necessarily."

"It truly depends connected concern performance," helium said pointing retired it's excessively aboriginal to archer present since it's lone been 3 months into the year.

Cathay received a lifeline from the authorities successful 2020, and is presently looking astatine a repayment of HK$1.5 cardinal successful penchant stock dividends owed to the authorities successful 2023.

"It is our program really to wage up each the cumulative penchant stock dividends wrong this year. And aft that ... we tin see dividend for our mean shareholders."