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Hong Kong’s Cathay Pacific narrows losses in first half
HONG KONG, Aug 8, 2018 (BSS/AFP) – Hong Kong flag carrier Cathay Pacific
said on Wednesday its losses had narrowed in the first six months of the year
but warned global economic uncertainty would pose a challenge as the firm
battles to revive its fortunes.
The firm posted a net loss of HK$263 million ($33.5 million), compared with
a HK$2 billion loss for the same period in 2017.
But it still fell short of some analysts’ estimates after being hit hard by
rising fuel costs.
Cathay shares were down more than two percent at HK$11.8 in afternoon
trading in Hong Kong.
The airline has come under pressure from lower-cost Chinese carriers and
Middle East rivals, which are expanding into Asia and offering more luxury
touches.
It booked the first back-to-back annual loss in its seven-decade history in
March.
The firm previously pledged to cut 600 staff including a quarter of its
management as part of its biggest overhaul in two decades.
Chief executive Rupert Hogg took over in May 2017, replacing Ivan Chu, who
had been in the job for three years.
There was no specific reference to the possibility of further job cuts or
restructuring Wednesday, but chairman John Slosar said in a statement that
the company’s “transformation programme” would continue.
Hong Kong’s South China Morning Post reported last month there would be a
“consolidation” of Cathay’s overseas operations, prompting fears over further
job losses.
Cathay confirmed to AFP Wednesday that it was restructuring the
organisation of its “outports”.
“An internal memo has been shared with the employees of the Cathay Pacific
Group as our regional and country teams start to communicate and, where
necessary, consult with their local teams on the restructuring,” it said in
email to AFP without giving further detail.
Wednesday’s results missed a median estimate for a profit of HK$140 million
in a Bloomberg News survey of five analysts.
Cathay said although its performance had been boosted by strong cargo
business and a weak US dollar, it had been dragged by increased fuel prices.
Fuel is the group’s most significant outlay, accounting for 30.1 percent of
total operating costs.
Fuel costs including hedging losses in the first half of 2018 stood at
HK$16 billion, compared with HK$14.9 billion in the same period in 2017.
Slosar predicted the airline’s performance would improve in the second half
of the year.
“The strength of the US dollar and economic uncertainty arising from global
trade concerns remain challenges,” he said in a statement.
“But we still expect passenger yields to continue to improve and the cargo
business to remain strong.”
BSS/AFP/HR/1305