Hong Kong’s Cathay Pacific Airways posted a profit of HK$5.5 billion (US$708 million) for 2011, a decline of 61 percent from a record profit of HK$14 billion for 2010, which included HK$3 billion in profit on the sale of non-recurring items, as the company was affected by high fuel prices and “instability and uncertainty in the world’s major economies.”
Christopher Pratt, Cathay Pacific chairman, said: “We faced a number of major challenges in 2011 and we are still operating in a very challenging environment, particularly for our cargo business.” He added that 2012 will be even more challenging for Hong Kong’s biggest airline.
The company, the world’s fourth biggest in market value, said in a March 14 statement that cargo business was adversely affected by reduced demand from its two most important markets, Hong Kong and China.
High jet fuel prices also had a significant impact on operating results. Cathay Pacific saw gross fuel costs increased by HK$12.4 billion (or 44.1 percent) in 2011.
Cargo revenue for 2011 increased by 0.3 percent to HK$2.5 billion compared to 2010. Capacity increased by 6.9 percent, but load factor fell by 8.5 percentage points to 67.2 percent.
Said Pratt: “After a record year in 2010, we faced a number of major challenges in 2011: the instability of the global economy, the weakness of the air cargo market, the reduction of yields in economy class, the impact of natural disasters in Japan and Thailand, unrest in the Middle East and continued high jet fuel prices.”
This year, the company expects its cargo business to remain weak as economic uncertainties have continued into the first half of the year. Pratt also noted that with fuel prices rising further, “2012 is looking even more challenging than 2011 and we are therefore cautious about prospects for this year.”
Photo: Cathay Pacific
