HONG KONG's Cathay Pacific group is past the halfway mark of a three-year restructuring effort that started in 2016 aiming to cut HK$4 billion (US$509,588 million) in costs and boost revenue
HONG KONG's Cathay Pacific group is past the halfway mark of a three-year restructuring effort that started in 2016 aiming to cut HK$4 billion (US$509,588 million) in costs and boost revenue. So far it has axed 600 of 3,600 head office jobs in Hong Kong and begun consulting selected employees based in its 100 offices worldwide on trimming staff numbers, reported Hong Kong's South China Morning Post. The company employs about 7,600 outside Hong Kong.
The big challenge lies in reducing the pay and benefits of its 3,300 pilots by 10 per cent, or HK$1 billion.
https://crucialperspective.com/http://' target='_blank' class='external noeffect'>Crucial Perspective was the most cautious among analysts the Post surveyed, forecasting a HK$1.8 billion first-half loss.
'The 32 per cent year-on-year spike in spot jet fuel prices in [the first half of 2018] is a huge challenge as fuel is Cathay Pacific's largest cost component,' Ms Png said.
The 32 per cent year-on-year spike in spot jet fuel prices is a huge challenge as fuel is Cathay Pacific's largest cost component.
'As Cathay's fuel hedges were locked in at higher prices, they cannot offset the negative impact of higher spot fuel prices.'
At the opposite end, a bullish analyst from a major European bank, who declined to be named, predicted a half-year HK$156 million profit, taking into account a big increase in revenue more than covering rising costs.
Geoffrey Cheng Bok-hoi, deputy head of research at investment bank Bocom International, said he expected the airline to make a net profit of HK$140 million, citing higher revenue due to improved yields - selling more fares - which outpaced its rising costs.
