Cathay Pacific’s loss narrows to US$33 million as rising costs hamper its turnaround
But Hong Kong’s flag carrier saw 15.7 per cent growth in revenue driven by strong earnings in its cargo business and an ability to charge passengers more
Cathay Pacific Airways narrowed its losses to HK$263 million (US$33 million) in the first half of this year but it continued to grapple with rising costs, especially from fuel, according to financial results released on Wednesday.
Higher expenses overshadowed the group’s improvement in revenue, which grew 15.7 per cent to HK$53 billion on the back of strong earnings from its cargo business and an increase in airfare prices.
Cathay Pacific, one of Asia’s largest airlines, is midway through a three-year cost-cutting exercise to remove HK$4 billion from its books.
But its overall costs still rose 8.5 per cent to HK$53.3 billion in the first six months of the year.
Every expense item in its financial report grew compared with the same period last year, with fuel costs rising 7.4 per cent, airport landing and parking fees up 18.4 per cent and aircraft maintenance up 5.2 per cent.
In the same period last year, the airline recorded its highest loss in a decade of HK$2.05 billion. Late last week, estimates four analysts gave to the Post ranged from a HK$1.8 billion loss to a HK$154 million profit.
In a note to shareholders on Wednesday, John Slosar, the airline’s chairman, said the operating environment for it and its sister carrier Cathay Dragon “remains challenging”.
But he signalled a positive picture for the rest of the year, saying the airline’s turnaround was “on track” and while there was more to do, he was “confident in [the] future”.