Cathay’s profits fall 61%

Victoria
By Victoria March 15, 2012 17:07

Cathay’s profits fall 61%

Cathay Pacific Airways has announced a 61% fall in profits last year due to persistently high fuel prices and weakness in the world’s major economies.

The airline posted a profit of 5.5 billion Hong Kong dollars ($709 million) for 2011, down from 2010’s record HK$14 billion. The 2010 profit which was boosted by some one-time gains. Earnings per share fell to HK$1.40 from HK$3.57.

Fuel costs rose by HK$12.5 billion, or 44%, in 2011 from the year before, which the airline managed to offset some of that with a HK$1.8 billion profit from fuel hedging contracts, which cover about 20% of its fuel costs.

Chairman Christopher Pratt warned that 2012 is “looking even more challenging” than 2011 because of uncertainties including weakness in Europe and the United States, an unsettled Middle East and a forecast slowdown in China.

Demand for cargo was also down and Cathay’s air cargo division, which accounts for 26% of revenue, shipped 8.6% less freight last year.

Cathay and its subsidiary Dragonair carried 27.6 million passengers last year, 2.9% more than in 2010.

Victoria
By Victoria March 15, 2012 17:07
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