Cathay Pacific Airways’ net profit up 20 per cent to HK$3.15 billion

Cathay Pacific Airways, which includes Cathay Pacific and Dragonair, posted net profit of HK$3.15 billion for 2014, up 20 per cent from HK$2.62 billion in 2013 but missing the market estimate of HK$3.5 billion.

Turnover was HK$106 billion, up from HK$100.5 billion, in line with expectations.

Chairman John Slosar said: “For the full year, passenger demand was reasonably firm, with high demand during the peak summer and Christmas periods. After a prolonged period of weakness, cargo demand started to improve in the summer of 2014 and was strong in the fourth quarter, which is the peak period for cargo.”

He said the company benefited from lower fuel prices in the fourth quarter - when global oil prices halved compared with mid-year, but this was partially offset by Cathay’s hedging at higher prices. Its fuel bill jumped 5.7 per cent to HK$40.3 billion, which included HK$911 million of hedging losses.

Yield, the airline trade’s unit profitability indicator, slipped 1.8 per cent in the passenger business to 67.3 HK cents and 5.6 per cent to HK$2.19 for cargo and mail. Load factor increased by 1.1 percentage points to 83.3 per cent for the passenger business and by 2.5 percentage points to 64.3 per cent for cargo.

Slosar said the company’s cargo revenue increased by 7.3 per cent to HK$25.4 billion on a good second half.