Cathay profits dive as competition intensifies

Cathay profits dive as competition intensifies
By admin

The high cost of fuel, pressure on yields and fierce competition took their toll on Cathay Pacific last year as profits slumped more than 83%.

Economic uncertainty in Europe and weak cargo demand were also blamed for the decline which saw profits fall from HK$5.5 billion (A$688m) to HK$916m (A$114m).

Passenger revenue climbed 3.5%.

The carrier said strong competition on key routes put pressure on yields with premium traffic hit by cost cutting by corporations.

"The high cost of fuel made it more difficult to operate profitably, particularly on long haul routes operated by older, less fuel efficient aircraft," Cathay said.

Chairman Christopher Pratt branded fuel as its greatest challenge, particularly as long haul flying forms a large part of its business.

"The group operates in a volatile and challenging industry, one that will always be highly susceptible to external factors that remain largely beyond our control," he said.

Fuel surcharges climbed 1.7% which was largely responsible for a 1.2% increase in yield.

The carrier will "take whatever further measures are necessary" if conditions do not pick up, Pratt added.

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