Cathay Pacific profits jump 400%

Cathay Pacific experienced a sharp rise in profits in the first half of 2015.

The Hong Kong-based company generated profits of HK$1.97 billion (US$254 million) for the six months to 30 June 2015, up 468% compared to the same period last year.

This result was driven by a significant decline in the company’s expenses, including a 38.5% drop in fuel prices. But fuel remains Cathay’s biggest expense, accounting for 34% of the company’s total operating costs.

Cathay’s revenues dipped 0.9% year-on-year to HK$50.39bn.

Combined, Cathay Pacific and its sister carrier Dragonair handled 19.79m passengers in the first six months of the year, up 8.5%, while average load factors climbed two percentage points to a strong 86.0%. The airlines operated 45,549 flights during this period, up 5.3% year-on-year.

“The operating environment was generally positive in the first half of 2015. Passenger and cargo demand was generally strong,” said Cathay Pacific’s chairman, John Slosar. “We reduced our operating costs due to lower fuel prices, partially offset by fuel hedging losses. We continued to manage non-fuel costs effectively.

“But,” he added, “we face challenges. Yield remained under pressure and there is increasing congestion at Hong Kong International Airport. We strongly support the construction of a third runway at the airport and believe that construction should start as soon as possible.”

Cathay launched two new routes in the first half, connecting Hong Kong with Zurich and Boston, and next month it will commence services to Dusseldorf. Dragonair recently launched a new route to Hiroshima.

The airline took delivery of seven new aircraft in the first six months of 2015: four Boeing 777-300ERs and three Airbus A330-300s. These replaced seven older passenger aircraft – four B747-400s and three A340s – which were removed from service. And Cathay’s first brand new A350-900 aircraft is scheduled to be delivered in February 2016.