Cathay Pacific profits slump 61%
The Cathay Pacific Group suffered a sharp drop in profits last year, and warned that the worst may be yet to come.
The Hong Kong-based airline group posted profits of HK$5.50 billion (US$709 million) in full-year 2011, down 60.8% from the HK$14.05 billion achieved in 2010. While the company’s revenues increased 9.9% year-on-year to HK$98.41 billion, it was also hit by a 44.1% jump in jet fuel costs.
“2012 is looking even more challenging than 2011 and we are therefore cautious about prospects for this year,” Pratt said. “Looking ahead, economic uncertainties have continued into the first half of this year. While these uncertainties continue, we expect pressure on economy class yields and our cargo business in particular to remain weak.”
Cathay’s passenger revenue for the year totalled HK$67.78 billion, up 14.2% year-on-year, and accounted for 68.9% of the group’s total revenue. Between them, Cathay Pacific and Dragonair carried a total of 27.6 million passengers last year, a rise of 2.9% compared with 2010. This failed to match a 9.2% rise in available seat capacity however, causing average cabin load factors to drop 3.0 percentage points.
“We faced a number of major challenges in 2011 and we are still operating in a very challenging environment,” Pratt said.
“However, the Cathay Pacific Group has a clear strategic focus and we are moving ahead with a number of initiatives that will make our airlines stronger and provide a better experience for our customers. For example, the group is taking delivery of 19 new aircraft in 2012. We are introducing a new premium economy class product, new long-haul economy class seats and continuing with the roll-out of our acclaimed new business class… all of which will improve connectivity and boost Hong Kong’s role as one of the world’s premier international aviation hubs.”