Business Round-Up
Late year rally boosts Cathay's bottom line
April 1st 2013
Cost-cutting, a late pick-up in flight demand and a year-end boom in cargo helped Cathay Pacific Airways reverse its 2012 first half loss of HK$935 million (US$121.1 million) into a second half net profit of HK$1.85 billion. Read More »
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| Cathay Pacific Airways: cargo a major drain on 2012 results |
Net income for the year of HK$916 million was 83% down on 2011. The result was still better than forecast.
While Cathay Pacific executives said fuel was still the airline’s “biggest challenge” – the cost rose 0.8% to 41% of operating costs in 2012 - it was the ongoing cargo doldrums that were heavily affecting Cathay’s bottom line. Cargo revenue, which accounts for between 25% and 30% of the carrier’s income, fell 5.5% to HK$24.6 billion in 2012 compared with the previous year.
Cathay chief executive, John Slosar, said the spurt in November and December was useful for the balance sheet as there had been no cargo growth in the previous 16 months. The late-year run has not been sustained so far this year, he added.
Shanghai-based Air China Cargo, which is 49% owned by Cathay, reported losses of HK$600 million.
Cathay’s passenger revenue increased 3.5% in 2012 to HK$70.1 billion. Capacity rose 2.6%.
The airline’s chairman, Christopher Pratt, said the outlook for passenger traffic was stable, but air fares were below expectations. Passenger yield fell 3.5% year-on-year.
