Hong Kong carrier Cathay Pacific reported a record HK$21.6 billion (US$2.8 billion) loss in 2020, a year that the company’s chairperson said was the “most challenging” in the airline’s seven-decade history.

The carrier said on Wednesday that it lost HK$9.9 billion in the first half of last year, with losses increasing to HK$11.8 billion in the second half. Last October, the company closed its regional Cathay Dragon brand and cut around 8,500 jobs — close to a quarter of its entire workforce.

“Market conditions remain challenging and dynamic,” said Cathay chairperson Patrick Healy, who added that it was by no means clear how the pandemic and its impact would develop over the coming months.

“Our short-term outlook continues to be challenging. However, we remain absolutely confident in the long-term future and competitive position of our airlines,” he added.

The airline would not be paying out its preferred dividends this year, with Healy saying that all cash-preservation measures will continue unabated. Last June, Cathay received a government bailout package worth HK$39 billion.

The carrier’s loss was slightly higher than Bloomberg’s consensus estimate of HK$19.63 billion.

Cathay’s passenger numbers in 2020 fell by 86.9% compared to the year before. Healy said passenger traffic in 2021 is expected to remain “well below half” of pre-pandemic levels.

While the airline was looking forward to a vaccine-led recovery, Healy said that any correlation between vaccine rollout and the resumption of commercial travel was “highly uncertain and difficult to predict.”

Crew quarantine restrictions imposed by the Hong Kong government had also cost Cathay up to HK$400 million a month, said Ronald Lam, Cathay’s chief customer and commercial officer.

More than 8,000 aircrew members were quarantined and no infections were detected, which showed that there was a “very low risk” of them bringing COVID-19 into Hong Kong, Lam said. Cathay also noted that the vaccination sign-up rate among its staff was “strong and encouraging.”

Healy said he saw no immediate need to cut more jobs but did not rule out the possibility as the coronavirus situation continued to develop. A majority of local ground staff and overseas employees had taken pay cuts, the company said.

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