Cathay Repays Government COVID-19 Payment

Cathay Group, home to Cathay Pacific, has announced the repayment of the HK$19.5 billion investment from the government that it received during the global pandemic.

Significant state aid was received to recapitalise the Group, which is very important to Hong Kong and the broader industry.

Cathay says that it was able to buy back the remaining 50%, which is equivalent to almost HK$10 billion of preference shares issued by the government. The initial 50% came as part of a deal agreed in December 2023.

In addition to the repayment, Cathay Group was also able to make its first dividend payment to ordinary shareholders for the first time since 2019, totalling HK$2.8 billion.

Thus, the Group’s ability to close this chapter is another major step in the overall rebuilding process, which has had its fair share of bumps.

The support Cathay received is deemed crucial to the group’s long-term future and to solidifying its spot within the industry.

Despite this support, the airline group experienced its fair share of hardships, with many unclear about its future if restrictions persisted.

Cathay saw its passenger numbers drop well below 99% of its pre-pandemic figures for a prolonged period, and as other markets recovered, Hong Kong and, thus, Cathay Pacific’s network lagged.

Now, the Group is committed to turning the page on a chapter that will have taught it many things but ultimately one it would like to forget quickly.

Cathay says it wants to remain a driving force and do so positively to support Hong Kong’s future growth and be a key hub for international aviation development long into the future.

Being able to repay the recapitalisation is a weight on Cathay’s shoulders, and it can now progress with further investments in the business that’ll benefit the long-term.

Cathay Group is interested in purchasing new aircraft to aid its future flying. While this is still being negotiated, knowing that the paying-off efforts are completed will provide greater confidence in the future.