The Cathay Group signalled that the airline is on the "right track" to recovery as it continues to rebuild its network and capacity following the years-long impact of the Covid-19 pandemic.

In a statement, it said that with this positive development, the Group would pay the deferred dividend of HK$1.524 billion on the preference shares held by the Hong Kong SAR (HKSAR) government on June 30, 2023, bringing its deferred dividend payments up to date.

The Cathay Pacific Group also intends to pay all future preference shares dividends as they fall due and to redeem the preference shares in due course.

Furthermore, the Group announced that it would not need to utilise the HK$7.8 billion bridge loan facility extended to it by the HKSAR Government, which will expire on June 8, 2023.

The preference shares and bridge loan facility were an investment by the HKSAR Government to support the Cathay Group and the Hong Kong international aviation hub through the COVID-19 crisis.

The overall HK$39 billion recapitalisation in June 2020 comprised three tranches: the issuance of HK$19.5 billion preference shares and warrants to the HKSAR Government, a HK$7.8 billion bridge loan facility provided by the HKSAR Government, and an HK$11.7 billion 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, which enabled the Cathay Group to navigate through the most challenging period in our 76-year history and keep the Hong Kong international aviation hub connected," said Ronald Lam, chief executive officer.

He noted that as travel restrictions get lifted and travel demand returns, the Cathay Pacific Group, further to being overall operating cash generative in 2022, has continued to be operating cash generative so far in 2023.

"Our financial position remains healthy. As such, 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 added.

The Cathay Group, comprising passenger airlines Cathay Pacific and HK Express, targets to operate around 70% of pre-pandemic passenger flight capacity covering about 80 destinations by the end of 2023, with the aim of returning to pre-pandemic levels by the end of 2024.