Cathay Pacific has reported a 61 per cent drop in annual profits and says tougher times are ahead.
The Hong Kong based airline blamed the weaker than expected result on a familiar combination of high fuel prices and global economic instability, factors the carrier says have worsened during the early part of this year.
“As a result, 2012 is looking even more challenging than 2011 and we are therefore cautious about prospects for this year,” chairman Christopher Pratt said in a statement.
Asia’s fourth largest airline and the world’s largest cargo carrier, Cathay recorded 2011 profits totaling HK$5.5 billion (A$671 million), down from record 2010 profits of HK$14.05 billion (A$1.7 billion). The cost of fuel, Cathay’s largest expense, rose 44 per cent to HK$12.46 billion in 2011, the airline said.
Cathay reported an 8.6 decline in cargo traffic for the year, while passenger numbers grew 2.9 per cent. Air China, which is 19 per cent owned by Cathay, contributed 31 per cent of the airline’s pre-tax profits.