Cathay Pacific swings to profit in first half
- 14 August 2013
- From the section Business
Hong Kong-based airline Cathay Pacific swung back to profit in the first half of the year, helped by a drop in its fuel bill and cost-cutting measures.
It made a net profit of 24m Hong Kong dollars ($3.1m; £2m) during the period, reversing a loss of HK$929m a year ago.
The airline said its fuel costs fell after it withdrew older aircraft and began operating long haul flights using more fuel efficient planes.
But it warned that its fuel bill remains high despite the drop.
"Fuel remains the group's most significant cost, accounting for 38.8% of our total operating costs during the period," Christopher Pratt, Cathay Pacific chairman said in a statement.
"Managing the risk associated with high and volatile fuel prices remains a high priority."
The airline, which has been hurt by slowing demand for corporate travel in recent years, has taken various steps over the past year to cut costs.
These include offering unpaid leave to its cabin crew, cancelling some long-haul flights and retiring less fuel-efficient planes.
On Wednesday the carrier said that all of the long-haul flights that were cancelled as part of the cost cutting plan will be fully restored by September.
It will add an additional flight to London and a new daily service to Newark airport in the US in March 2014, subject to regulatory approval.
Cathay is also the world's biggest air cargo carrier.
But it has seen a big drop in that businesses in recent years, hurt by an economic slowdown in key markets such as the US and Europe.
Cathay's cargo revenue fell by more than 5% in the first six months of the year compared with a year earlier.
"Our cargo business has been affected by weak demand since April 2011," Mr Pratt said. "There is still no sign of sustained improvement."
But the airline said that its new cargo terminal at Hong Kong International Airport, which is expected to be fully operational by the last quarter of this year, will help reduce costs and "improve efficiency in our cargo business".