Cathay upbeat after lift in first half profit
Cathay Pacific says things are looking up for the rest of 2014 despite a challenging operating environment after posting a big lift in first half profit.
The Hong Kong-based carrier reported net profit of $HK347 million for the six months to June 30 2014, up significantly from $HK24 million in the prior corresponding period.
While load factors – an industry measure of how full planes are – rose 2.3 percentage points to 83.6 per cent, Cathay said the lift in passenger numbers came at the expense of yields, which were down 3.5 per cent in the half amid strong competition.
Cathay, which flies 70 services a week to Australia, said passenger demand was strong in all classes on long-haul routes and “generally robust” on regional routes. However, demand was weak on certain South-East Asian routes.
The airline group, which also includes regional carrier Dragonair, was also battling overcapacity in the cargo market, high fuel prices and a disappointing performance from one of its associated companies Air China.
Despite the difficult operating conditions, Cathay chairman John Slosar was upbeat about the period ahead.
“We expect business to be better in the second half of 2014,” Slosar said in a statement on Wednesday.
“Our financial position remains strong and will enable us, despite the current difficult trading conditions, to maintain the quality of our products and services and to continue with our long-term strategic investment in the business.
“As always, we remain committed to strengthening the world class aviation hub in our home, Hong Kong.”
In terms of fleet changes, Cathay said it would take delivery of 11 new aircraft for both Cathay and Dragonair, while four Boeing 747-400 aircraft will be retired.
Cathay said Air China posted a loss in the first half due, in part, to substantial foreign exchange losses caused by the depreciation of the Chinese renminbi.
Under a cross shareholding structure, Cathay owns 20.13 per cent of Air China, while the Chinese flag carrier has a 29.99 per cent stake in Cathay.