Thu, Feb 21, 2019 - Page 10 News List

Cathay Pacific ends two years of losses

AFP, HONG KONG

Hong Kong flag carrier Cathay Pacific Airways Ltd (國泰航空) yesterday said that it is expected to have swung back to profit last year, ending two years of losses, despite suffering an embarrassing data breach at the end of last year.

The airline expects to record a consolidated profit of about US$293 million, compared with US$160 million losses the year before, according to a preliminary profit alert.

The company’s share price jumped more than 6 percent after the announcement as investors took comfort in the turnaround after two grim years for Asia’s largest carrier.

“In 2018, the passenger business benefited from capacity growth, a focus on customer service and improved revenue management,” the company said in a statement, adding that its cargo sector was also “strong.”

Cathay has been overhauling its business after posting it first losses in eight years in 2016, firing more than 600 workers, and paring overseas offices and crew stations as it faced stiff competition from budget rivals in China.

It also added international routes and better services on board its flights in a bid to compete with well-heeled Middle Eastern long-distance carriers.

The profit alert suggests that the moves have paid off.

The airline narrowed its losses to US$33.5 million in the first half of last year — a 10th of what they were for the same period in 2017.

The second half of the year appears to have brought Cathay squarely back into the black.

Cathay is expected to further benefit from the end of costly fuel-hedging contracts this year, Kingston Securities (金利豐證券) analyst Dickie Wong (黃德几) said.

“I would say the unfavorable impact to Cathay would continue to reduce,” he added.

The introduction of premium economy had attracted new customers, while ticket discounts helped it compete against budget carriers, he said.

However, the company still had “much room to improve in their luxury classes” if it wants to take on Middle Eastern rivals, Wong added.

Cathay is to announce its full-year result next month.

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