Airline News
Cathay looks into profitable future
May 4th 2015
Ivan Chu, chief of Hong Kong’s Cathay Pacific Airways, is optimistic about the airline’s long-term profit delivery to shareholders, four years after the last decade-long run ended. Read More » "If the fuel price environment is benign, if economic growth continues in this region - and we expect that to be the case - and the cargo business continues to recover, then surely [the 2010 high point] is something we can work towards," Chu told the South China Morning Post last week. Profit attributable to Cathay's shareholders was a record HK$14 billion ($1.8 billion) in 2010, and while last year's HK$3.15 billion remains short of the then record HK$5 billion profit in 2000, it was up 20.2% on 2013 despite Chu's characterisation of 2014 as "a very challenging year".
The Swire Group carrier is banking heavily on cargo this year to boost its bottom line. After the freight market depression from 2012 through to second-half 2014, Chu said Cathay Pacific Cargo figures in first-quarter 2015 show a 15.4% year-to-date rise in RTKs, compared to the year-ago period. Cathay has met this growth by adding close to 10% capacity. Meanwhile, James Woodrow, cargo director at the airline, told This Week in Asia-Pacific that the U.S. West Coast sea port congestion continues to benefit the airline. Woodrow said he believed the backlog would not be cleared before mid-year. China and India, he said, are picking up again, while the Asia-Europe market remains weak. Europe-Asia loads give rise to optimism as Asia-Pacific demand for European e-merchandise and perishables is up, he added.
Meanwhile, a new labour dispute threatens to hit the airline as its biggest cabin crew union said it would follow the carrier’s pilots in taking industrial action over pay and meal allowances. At issue are permanent contracts for crew who have completed their initial three-year contracts. The airline is asking those who started after March 31, 2012, to sign contracts with basic pay about 10% lower than those who signed up beforehand. Rates per flying hour have dropped from HK$176.80 ($23) to HK$159.30, while the ground duty allowance has dropped from HK$88.40 to HK$79.65. The union also disputes an average 18% meal allowance reduction, since February, for cabin crew posted to Melbourne, and said it has heard the practice would soon be extended to include Nagoya and Paris.
