Cathay Pacific forecast to see earnings dive
The airline, hit by high fuel costs, weak demand and uncertain economic conditions, is expected to report 90 per cent fall in profit for last year
The good news is that Cathay Pacific Airways remained in the black last year. The bad news is that net profit is likely to have fallen almost 90 per cent to about HK$570 million when the airline group reports its annual results on Wednesday.
While Cathay battled high fuel costs, weak passenger and cargo demand and uncertain economic conditions last year, the outlook for this year looks equally challenging.
Chief executive John Slosar warned in November the airline had experienced a "difficult" year. These headwinds continued in December. While Cathay and Dragonair reported a combined 2.5 per cent rise in total passenger numbers, passenger revenue per kilometre dropped 3.1 per cent.
Cargo, which in good times contributed almost 40 per cent of revenue, has been badly affected by the economic woes in Europe and North America, as well as increased competition from ocean freight. Total cargo volumes fell 5.3 per cent last year.
Nick Rhodes, a director of Cathay Pacific Cargo, said there were year-on-year increases in airfreight volumes in September and October. But the rebound spluttered, and loads softened in December.
Slosar, outlining the challenges facing the airline last year, said fuel costs were about 6 per cent higher than budget and accounted for 41.6 per cent of operating costs in the first half. Other costs, including airport, catering and landing charges, also rose.
