A Southwest Airlines flight takes off as United Airlines planes sit parked on a runway at Denver International Airport as the coronavirus pandemic slows air travel on April 22, 2020 in Denver, Colorado. Compared to the same time last year, Denver International Airport is operating 1,000 fewer flights daily. (Photo by Michael Ciaglo/Getty Images)

Hong Kong has taken part in the Cathay Pacific as part of a 5 5 billion bailout

Cathay and parent company Soar Pacific on Tuesday announced plans to raise HK 39 39 billion (5 5 billion) in the new capital to help the airline survive the crisis caused by the coronavirus epidemic.

The Hong Kong government will provide the bulk of the new funding by increasing the HK 27 27.3 billion ($ 6.3 billion) bailout package, combining funds and the purchase of preferred shares. The rest of the capital will come from the issuance of new stock.

The deal is that the Congolese government-owned limited company Aviation 2020 will leave, with Cathay having a %% stake. City Finance Secretary Paul Chan told reporters the government would also appoint two observers to the Cathay Board to protect investment.

Patrick Haley, chairman of Cathay, told reporters on Tuesday that the airline was grateful for the government’s “capital assistance”, which continues to help Cathay Pacific conduct its operations and contribute to the status of Hong Kong’s international aviation center.

“Without this plan the alternative could have been the collapse of the company,” he said.

The business was already in recession due to Hong Kong’s flagship career Massive protests The city was shaken last year when the coronavirus epidemic struck.

Business and vacation travel have stopped since coming and going from Asian financial centers elsewhere. Haley said Tuesday that Cath’s passenger earnings are down about 1% from the normal level. Career executive pay, reduced employee salaries, and working with 3% power to save cash. It announced on Tuesday that it would cut executive pay by 30%.

The global aviation industry has been crippled by the carnivirus epidemic, and elsewhere governments have been able to bail out large airlines. Germany is leading Lufthansa in a $ 10 billion bailout. The total cost of official bailouts for U.S. airlines, meanwhile, Reached 50 billion.

Cathy has been burning about HK প্রায় 3 billion (৮ 387 million) a month since February of this year, drawing দ্রুত 20 billion (২ 2.6 billion) in cash at the beginning of the year.

The airline is now re-evaluating all aspects of its business model and “this will certainly involve more rationalization of future planning capabilities than our pre-crisis pre-planning,” Haley said.

Kathy said it was unlikely to return to the same number of flights it was running any time soon before the epidemic.

Sue Pacific (SWRAY), A business empire owned by one of Hong Kong’s wealthiest families, said in a statement that it supports the restructuring plan. Cash injections will “maintain competition and operations” in the midst of unprecedented challenges for the global travel market, the agency said.
After the end of the contract, Sawyer will reduce its stake in Cathay from 45% to about 42.3%. Other large shareholders Chinese aircraft (AIRYY) And Qatar Airways has a slightly smaller stake in Cathay at about 26% and 9%, respectively.
The Hong Kong government has a vested interest in maintaining the city’s aviation. More than 744 million passengers traveled to the airport in 2018. Before the C Covid-19, it operated 1,100 passenger and cargo flights daily and served nearly 200 destinations around the world, contributing 5% to Hong Kong’s GDP directly and indirectly.

“Hong Kong is a city better than the United States or China, when our international flights don’t run, Hong Kong will stop,” he said. Chan told reporters.

Both Kathy and Hong Kong officials said the government does not intend to be a partner in the long run.

The opportunity to pay dividends for government-preferred shares has been created to encourage people to pay and redeem shares on an early basis, Healy said..

The government has provided সহায়তা 123 billion in financial aid to airlines around the world, the International Airport Transport Association said in a report in May. Most of the assistance includes loans, loan guarantees and pending fees that have to be paid, the aviation group said.

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