CATHAY PACIFIC AIRWAYS ANNOUNCES 2014 INTERIM RESULTS
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The Cathay Pacific Group reported an attributable profit of HK$347 million for the first six months of 2014. This compares to a profit of HK$24 million in the first half of 2013. Earnings per share were HK8.8 cents compared to earnings per share of HK0.6 cents for the corresponding period in the previous year. Turnover for the period rose by 4.6 per cent to HK$50,840 million.
John Slosar, Chairman, Cathay Pacific said, “The operating environment for the Cathay Pacific Group - and the aviation industry as a whole - remains challenging. We face significant competition in our passenger business. This makes it difficult to maintain yields. The air cargo business remains problematic because of excess capacity. Intense competition similarly puts pressure on yield. On the plus side, we continue to strengthen our passenger network and the connections available through Hong Kong. The high quality of our products and services increases our attractiveness to passengers.”
The Group’s passenger revenue in the first six months of 2014 increased by 4.4 per cent to HK$36,520 million compared to the same period in 2013. Capacity increased by 5.3 per cent as a result of the introduction of new routes (to Doha and Newark) and increased frequencies on existing long-haul routes. The load factor increased by 2.3 percentage points to 83.6 per cent, but the increase in passenger numbers was at the expense of yield, which fell by 3.5 per cent to HK66.6 cents. Passenger demand was strong in all classes of travel on long-haul routes. Demand on regional routes was generally robust, although strong competition put downward pressure on yield and demand was weak on certain Southeast Asian routes.
The Cathay Pacific Group continues to modernise its fleet. In the first six months of 2014 it took delivery of five new aircraft: two Boeing 777-300ERs, two Airbus A330-300s, and (for Dragonair) one Airbus A321-200. Two Boeing 747-400 passenger aircraft were retired during the period. As part of agreements entered into with The Boeing Company in 2013 the airline is selling its six Boeing 747-400F freighters back to The Boeing Company. Four of these freighters are now parked and all six will have left the fleet by 2016. In the first half of 2014, we planned the accelerated retirement of 11 Airbus A340-300 aircraft. Four of these aircraft will be retired by the end of 2015 and the remaining seven will be retired by the end of 2017. At 30th June 2014 it had 90 aircraft on order for delivery by 2024. In the second half of 2014, Cathay Pacific and Dragonair will take delivery of 11 new aircraft. Two of them were delivered in July and two of them were scheduled to be delivered in August. Four Boeing 747-400 passenger aircraft will be retired; two of them were retired in August.
Cathay Pacific introduced passenger services to Doha and Newark in March and has announced the introduction of services to Manchester and Zurich from December 2014 and March 2015 respectively. Flights were added on the Chicago, Los Angeles and Osaka routes. The airline stopped flying to Abu Dhabi, Karachi and Jeddah but improved its schedules on other Middle Eastern routes. Dragonair started flying to Denpasar-Bali and Penang and increased services on a number of other routes.
“We expect business to be better in the second half of 2014. Our financial position remains strong and will enable us, despite the current difficult trading conditions, to maintain the quality of our products and services and to continue with our long-term strategic investment in the business. As always, we remain committed to strengthening the world class aviation hub in our home, Hong Kong. Finally, we are particularly pleased that in July, Cathay Pacific was named the World’s Best Airline in the annual World Airline Awards run by Skytrax. This is the fourth time we have received this award,” Slosar added.