Cathay Pacific (CX, Hong Kong International) continues its upwards recovery trajectory, announcing this week that it was in a position to pay out a deferred dividend and let an bridging loan facility lapse unused.

In a June 6 filing with the Hong Kong Stock Exchange (HKEX), Cathay Pacific said it would pay an HKD1.5241 billion Hong Kong dollar (USD194.5 million) deferred dividend on preference shares held by the Hong Kong SAR (HKSAR) Government on June 30, 2023, bringing all deferred dividend payments up to date. Cathay Pacific expects to pay all future preference shares dividends on time.

The filing also notes that an unused bridging loan facility issued by the HKSAR worth HKD7.8 billion (USD995.4 million) will expire on June 8. "Our financial position remains healthy," said CEO Ronald Lam. "We feel confident that our journey of rebuilding Cathay for Hong Kong is on the right track, and now is the appropriate time to begin repaying the support that the HKSAR government has shown us."

Lam said Cathay Pacific benefitted from a HKD27.3 billion (USD3.48 billion) financial assistance package offered by the HKSAR in mid-2020. That included the untouched bridging loan facility and the issuance of HKD19.5 billion (USD2.49 billion) in preference shares and warrants to the HKSAR government. The airline also raised an additional HKD11.7 billion (USD1.5 billion) via a rights issue of ordinary shares to existing shareholders.

"We are extremely grateful to the HKSAR government and to all of our shareholders for their invaluable support during the Covid-19 pandemic," said Lam.

In April, the Cathay Pacific Group flew 1,381,073 passengers, a 3,283% increase on the April 2022 numbers, but a way short of the 3,127,186 passengers carried in April 2019. In addition to Cathay Pacific, the Cathay Pacific Group also includes HK Express (UO, Hong Kong International). In 2019, it also included Cathay Dragon, a now discontinued brand. In this week's filing, Cathay Pacific said it and HK Express intended to be back to 70% of pre-pandemic capacity by the end of calendar 2024 and 100% capacity by the end of 2024.