Cathay Pacific’s first half performance ‘below expectations’
Passenger numbers rise in June, though profitability remains under ‘intense’ pressure, according to chief executive
Cathay Pacific Airways warned shareholders on Monday that its performance in the first half of this year was “below expectations”.
In a statement to the Hong Kong Stock Exchange ahead of its interim results in August, chief executive Ivan Chu said passenger revenue had been adversely affected by a reduced load factor and intense pressure on yield [a measure of unit profitability].
“Cargo tonnage has stabilised but yield continues to decline. Foreign currency movements have also been adverse,” Chu said in the statement.
The company’s two airlines, Cathay Pacific and Dragonair, saw a 2.1 per cent growth in the number of passengers carried in June over last year, reversing declines in the previous two months. Then, last June it was affected by travel alerts caused by South Korea’s MERS outbreak.
The passenger load factor, a measure of utility, droped by 1.7 percentage points in June, to 85.5 per cent.
Patricia Hwang, Cathay’s general manager for revenue management, said pressure on yield “remains severe, with competition increasing and premium demand continuing to fall short of expectations”.
