Headaches increase for Cathay Pacific despite welcome half-year profit

Achieving a half-year net profit ranks as a rare bright spot for Cathay Pacific in the COVID-19 era so far. But it could also be a fleeting triumph, as the situation for the airline will get worse before it gets better.

While the airline's return to profitability was heavily dependent on surging cargo demand, the financial result also showed that Cathay's cost restructuring had been effective. And the airline can justifiably say that this demonstrates it can be successful in a post-pandemic environment - whenever that might be.

But that does not hide the fact that Cathay's capacity remains at basement levels thanks to heavy restrictions in its home market. Few other major airlines have had their operations reduced to such an extent as has Cathay, and due to further tightening of government restrictions its capacity is trending downward even further.

Mainland China is currently Cathay's largest market. However, the news is bleak there too, as the latest wave of COVD-19 cases threatens travel demand.