Cathay Pacific Seeks HK$2 Billion in Bond Offering Amidst Rising Fuel Costs

Hong Kong carrier Cathay Pacific is planning to raise about HK$2 billion through a fixed-rate Hong Kong dollar bond. The airline is considering issuing a three- or five-year bond. A global investor call is scheduled for Tuesday, with the bond deal potentially launching Wednesday.

This move comes as global airlines face significant operational challenges, including rising jet fuel prices. Cathay Pacific recently announced plans to cut some flights from mid-May to the end of June due to soaring fuel costs. The carrier will reduce approximately 2% of scheduled passenger flights, while its budget arm, HK Express, will cut about 6%. Service suspensions to Dubai and Riyadh are extended, with broader Middle East operations suspended earlier this year.

The airline noted strong performance on European routes in March, as travelers avoided disrupted Middle Eastern hubs, despite a doubling in jet fuel prices.