Cathay Pacific predicted to see a drop in earnings

HONG KONG- it was a challenging year for Cathay Pacific in 2012 due to weak passengers demand in many developed economies, continuous high fuel and high employees’ costs especially when compared with other airlines in Mainland China. Fares in premium classes (First, Business and Economy Premium) declined due to a weakening in demand from business travellers.
Other costs, including airport, catering and landing charges, jumped significantly last year. John Slosar, Cathay Pacific CEO, indicated recently that fuel costs were about 6 per cent higher than budget and accounted for 41.6 per cent of operating costs in the first half.

The outlook for this year looks equally challenging. John Slosar warned in November the airline had experienced a "difficult" year. These headwinds continued in December. While Cathay and Dragonair reported a combined 2.5 per cent rise in total passenger numbers, passenger revenue per km dropped 3.1 per cent.

However, Cathay Pacific succeeded to write a profit last year according to revelations made by the daily South China Morning Post. The Hong Kong newspaper announced that the airline probably recorded a net profit of about HK$ 570 million, the equivalent of US$ 66.1 million.

The airline has replaced older aircraft such as the Boeing 747-400 by fuel-efficient Boeing 777 on many routes resulting in a drop in capacity in long haul destinations to Europe as well as to the Middle East and India.

Sourced: TravelDailyNews