Cathay Pacific Airways chairman Peter Sutch has issued a series of warnings about the company's prospects over the next few years, pointing out factors that may dent profits. The warning came as the share price of Hong Kong's flagship carrier continued to languish at the $12 level, after closing as high as $14.80 in June. Mr Sutch said in the company's annual report that familiar pitfalls were lurking in the domestic and international aviation market. Much of his concerns related to the problem of dwindling margins among airlines worldwide. 'From now until 2000, the industry as a whole will be operating to very tight margins as fuel prices and over-capacity in the market remain constant concerns,' he said. He also said the limitations of Kai Tak airport were at their worst from Cathay's perspective. 'Congestion at Kai Tak International Airport will reach its worst levels in 1997, placing severe constraints on Cathay Pacific's ability to expand,' Mr Sutch said. High fees at the new Chek Lap Kok Airport would also impact earnings. 'The opening of the new airport in 1998 is expected to bring increases to our operational costs and the increased capacity into Hong Kong afforded by the new airport will put pressure on our yields,' he said. He added the new facility would provide substantial benefits to the airline industry in Hong Kong, as well as the economy overall, provided the pricing of the facility remained competitive. The company's financial statements revealed payments to its directors in the 1996-97 financial year rose more than 10 per cent - from $35 million to $39 million. Cathay had two directors in its top income bracket of between $5.5 million and $6 million per annum, compared with just one in 1995. The airline paid another director between $5 million and $5.5 million, while two other board members received between $4.5 million and $5 million.