CATHAY Pacific Airways is looking to run its air freight operations on a more autonomous basis. However, it is quick to dismiss suggestions that this is in preparation for spinning off Cathay Pacific Cargo to merge with its newly acquired cargo-handling subsidiary Air Hong Kong. The rumour started after Ian Cutler, the new head of Cathay's cargo operations, put out a media statement expressing the need to manage the cargo business as a distinct unit within the group, with full responsibility and accountability for its own business. This came just days after Cathay signed an agreement in principle with Shun Tak Holdings and a private company controlled by its chairman Stanley Ho to acquire a 75 per cent stake in Air Hong Kong at a price believed to be about $200 million. As part of the sale, Cathay would assume management control of all Air Hong Kong's operations. A Cathay spokesman said Mr Cutler's comments were intended to give Cathay Cargo a higher profile and underline the substantial profit contributions it made to the group. Cathay chairman Peter Sutch and his senior management colleagues have repeatedly stressed over the past few days that they have every intention of running Air Hong Kong as an independent business once its proposed takeover goes through. They have conceded, however, that Cathay will be looking to bring together both airlines' long-haul international freighter services and explore other areas where closer co-operation would benefit both companies such as maintenance, marketing and route planning. Despite difficult market conditions, Cathay Cargo's business grew 7.6 per cent last year, with revenues reaching US$642 million. This accounted for 18 per cent of the group's total revenue last year. Tonnage increased 13.1 per cent to 408,369 tonnes, while available cargo revenue tonne kilometres rose 19.5 per cent against an 12.7 per cent rise in cargo capacity.
