Annual losses at Cathy Pacific were trimmed to HK$5.6 billion (£530 million) in 2021 despite tight Hong Kong travel restrictions.
The figure compared to a loss of HK$21.6 billion the previous year as the Covid-19 crisis hit.
The improvement was primarily driven by strong cargo demand together with continued focus on effective cash and cost management, according to the airline.
But Cathay Pacific warned that it expects to burn up to HK$1.5 billion a month from February as capacity is cut due to aircrew quarantine requirements and travel restrictions imposed by the Hong Kong government.
The airline is only operating around 2% of its pre-pandemic passenger capacity this month and 20% of pre-pandemic cargo capacity.
Chief executive Augustus Tang said: “Regrettably, the capacity reduction will have an impact on Cathay Pacific’s business and we have been evaluating the potential impact of these measures on our operations and cost base.
“While passenger flights to the Chinese mainland will remain largely unaffected, capacity to the rest of the Cathay Pacific network will see a reduction to ensure continued compliance with the latest government measures.”
Reviewing the past year, Tang said: “Passenger travel remained extremely subdued throughout 2021, as a result of ongoing travel restrictions and strict quarantine requirements.
“We flew 717,059 passengers during 2021, getting people home, reuniting many of them with family, and helping students travel to and from school or university overseas. This compares to the 4.6 million passengers that we flew in 2020 and 35.2 million passengers that we flew in 2019.
“While passenger travel continued to be acutely affected, cargo demand was strong throughout the year.
“Despite quarantine restrictions and operational challenges, Cathay Pacific surpassed the milestone of 120 million Covid-19 vaccines carried in 2021. We carried more than 13.3 million doses in a single day. As a group, our airlines have carried more than 165 million doses of different Covid-19 vaccines around the world since the pandemic began.
“Having worked hard to tackle the challenges presented by the Covid-19 pandemic, taken decisive actions to create a more focused, efficient and competitive business and responded to strong cargo demand, we have reduced operating cash burn from the HK$2.5-3.0 billion range in the first half of 2020 down to marginally cash generative in the second half of 2021.”