Despite fuel prices soaring 31 per cent the Cathay Pacific Group recorded an operating profit of HK$697 million ($88.8 million) for the first half of 2018, compared with an operating loss of HK$1.7 billion in the same period last year.
The carrier also said Group revenue increased 15.7 per cent to HK$53 billion, its half-yearly results disclosure while passenger revenue rose 10.4 per cent to HK$35 billion, with passenger yields improving 7.6 per cent to HK$0.55 and capacity increased by 3.2 per cent.
The group reduced its attributable net loss to HK$263 million, compared to its 2017 net loss of HK$2.1 billion for the same period.
The load factor decreased by 0.5 percentage points to 84.2 per cent. Passengers carried increased by 1.9 per cent to 17.5 million. Yield increased by 7.6 per cent to HK 55.4 cents.
Cathay said growth in the first half of the year reflected the introduction of five new routes, increased frequencies on existing routes and the use of larger aircraft on popular routes.
Chairman John Slosar said the operating environment for its airlines “remains challgening”. He added: “We are half way through our three year transformation programme, which is designed to make our businesses leaner, more agile and more effective competitors. The programme is on track.”
Cathay Dragon introduced services to Nanning in January and to Jinan in March and reintroduced a service to Tokyo Haneda in March.
Cathay Pacific introduced services to Brussels in March, to Dublin in June and a seasonal service to Copenhagen in March and Barcelona became a year-round service in April while it stopped flying to Kota Kinabalu in January and to Dusseldorf in March.
In June, Cathay received the first of 20 new Airbus A350-1000 aircraft, a larger version of the Airbus A350-900 aircraft already in the fleet. It will be used on the new service being introduced to Washington D.C. in September and on other long-haul routes. At 30 June 2018, the Group had 78 new aircraft on order for delivery over the next five years.
As for the future, Slosar said: “Our airlines usually perform better in the second half of the year than in the first half of the year. We expect this to be the case in 2018. The strength of the US dollar and economic uncertainty arising from global trade concerns remain challenges.
“But we still expect passenger yields to continue to improve and the cargo business to remain strong. Fuel prices are expected to be higher. Hedging losses will reduce but net fuel costs will increase. Our new aircraft will improve fuel efficiency and we expect to generate more ancillary revenue.
“Our transformation programme will continue. We believe that we are on track to achieve our objective of achieving sustainable long-term performance for our airline businesses. There is still much to do, but I am confident in our future.”