HK$109 surcharge for Cathay and Dragonair passengers flying into Hong Kong after wrong-way bet on oil prices
Move follows 82 per cent slump in first-half net profit and HK$4.49 billion loss from hedging loss on fuel
Passengers flying with Cathay Pacific and Dragonair to Hong Kong will have to pay a fuel surcharge of HK$109 a trip starting from September 15 after a wrong-way bet on oil prices by their parent company, the airlines announced on Monday.
Cathay Pacific Airways said the surcharge was applicable to inbound passengers only. Outbound passengers would not be subject to the policy as the Civil Aviation Department had suspended surcharges for outbound passengers in February on the back of low oil prices.
The move came after the company reported a worse than expected 82 per cent slump in first-half net profit as its passenger business was hurt by cuts in corporate travel and a HK$4.49 billion loss from placing wrong-way bets on fuel prices. The hedging tactic aimed at minimising the unpredictable nature of fuel costs locked the carrier into higher prices.
“The decision to reintroduce the fuel surcharge overseas follows the practise currently adopted by other airlines in many of these markets,” the company said. “All itineraries originating from the city will not be affected.”
Cathay Pacific and Dragonair passengers were already hit in August with an airport departure surcharge at Chek Lap Kok ranging from HK$70 to HK$180.
According to the airlines’ website, the HK$109 charge will apply to flights to Hong Kong from the Southwest Pacific, including Australia and New Zealand, North America, Europe, Africa, the Middle East, and South Asia, starting from Thursday next week.