Cathay Pacific posts HK$2.3 billion profit for 2018 as Hong Kong airline turns corner
- Earnings helped by company’s stake in Air China and customer loyalty programme Asia Miles
- Outlook for 2019 being shaped by trade war with US and strained labour relations
Cathay Pacific Airways’ measures to cut costs and boost revenues have borne fruit, generating a HK$2.34 billion (US$293 million) annual profit and halting two years of back-to-back losses, as executives remained tight-lipped about a bid for rival HK Express.
The airline was cautiously optimistic about 2019, determined to build on recent gains despite geopolitical and macroeconomic headwinds, saying it would grow capacity 6.9 per cent this year, through flying more and further.
Delivering its annual results on Wednesday, the company said its core airline business provided a small, positive contribution of HK$241 million – a profit margin of just 0.2 per cent – as earnings were shored up by Cathay’s 18.13 per cent stake in Air China, its loyalty business Asia Miles, and holdings in cargo business ventures.
It unveiled an annual profit for the first time in three years on revenue of HK$111 billion, an increase of 14.2 per cent on the previous year. Cathay made a loss of HK$1.25 billion in 2017.
“Our transformation programme is yielding positive results. We are making good progress on each of them,” chairman John Slosar said at a post-results briefing, referring to the airline’s cost savings and productivity.