Cathay reports massive first-half losses

The Cathay Pacific Group has posted losses of HK$935 million for the first six months of 2012.

The airline has faced numerous challenges in 2012, including increasingly high fuel prices, weak air cargo demand and suffering passenger yields.

These factors had a major impact on Cathay’s operating results, particularly fuel costs, which rose 6.5 percent in the first six months of the year, compared to the same period in 2011.

“The cost of fuel is the biggest challenge, although the recent reduction in the fuel price will, if sustained, provide welcome relief,” Cathay Pacific chairman Christopher Pratt said.

“We will continue to take whatever measures are necessary to protect the business, managing short-term difficulties while remaining committed to our long-term strategy.”

Cathay Pacific responded to these issues with an action plan including schedule changes and capacity reductions, the withdrawal of older, less fuel-efficient aircraft from service, a recruitment freeze and the introduction of voluntary unpaid leave for cabin crew.

“Our financial position remains strong and we are in a good position to deal with our current challenges,” Mr Pratt said.

Long term business-benefiting endeavours were continued in the first-half of 2012 with the purchase of new aircraft, new product and Cathay’s own HK$5.9 billion cargo terminal at Hong Kong International Airport.

“We will continue to invest in the future, using our core strengths – a superb team, a strong international network, exceptional standards of customer service, a strong relationship with Air China and our position in Hong Kong – to ensure the continued success of the Cathay Pacific Group.”

Sourced: etravelblackboardasia