Cathay Pacific back to profit after two years of losses
HONG Kong's flag carrier, Cathay Pacific returned to profit in 2018 following two consecutive years of losses thanks to a transformation programme, but its has chairman warned of a challenging environment this year amid geopolitical tensions
HONG Kong's flag carrier, Cathay Pacific returned to profit in 2018 following two consecutive years of losses thanks to a transformation programme, but its has chairman warned of a challenging environment this year amid geopolitical tensions.
The airline reported net profit rose to HKD2.3 billion, (US$298.7 million) for the twelve months to the end of December, in line with the carrier's guidance issued in February, and bouncing back from a HKD1.26 billion loss in 2017. Revenue rose 14.2 per cent year on year to HKD111.1 billion.
The cargo business benefited from robust demand in 2018 with revenue from cargo increasing by 18.5 per cent to HKD28.3 billion. Capacity of Cathay Pacific and Cathay Dragon increased by 2.6 per cent. The load factor increased by one percentage point to 68.8 per cent. Cargo tonnage carried increased by 4.7 per cent, while yield rose by 14.7 per cent to HKD2.03, reflecting an increase in high-value specialist cargo shipments and higher fuel surcharges.
Cathay Pacific's chairman, John Slosar, said: 'The business environment is expected to remain challenging in 2019, with the forecast strength of the US dollar and uncertainty due to geopolitical discord and global trade tensions dampening passenger and cargo demand and intense competition, particularly on long-haul routes in economy class.'
Since launching its revamp programme in 2017 in a bid to cut costs amid competition from mainland Chinese and Gulf carriers, Cathay's initiatives have included cutting jobs at its head office and overseas ports, adding more economy class seats to older Boeing 777 jets and hedging fuel for shorter periods, according to media reports.
This year, Cathay plans to 'compete hard' by extending its route network to destinations not currently served from Hong Kong, increasing frequencies on its most popular routes and operating more fuel-efficient aircraft, Mr Slosar said in a statement.
The carrier, which lacks a budget arm, last week said it was in 'active discussions' about acquiring HNA's Hong Kong Express Airways Ltd, although an agreement has yet to be reached. It did not provide any further details.