Cathay Pacific said yesterday it returned to profit last year even as the Hong Kong-based carrier’s sales dropped amid turbulence in the global economy.
The airline said the bulk of its HK$4.7 billion (US$606 million) profit came from cost cutting and gains on fuel hedging bets, which had sparked Cathay’s massive HK$8.7 billion loss in 2008.
Cathay said it posted a modest HK$285 million operating profit last year as it wrestled with weak demand.
Revenues last year were down 23 percent year-on-year to HK$67 billion, it said.
“The global economic slump last year resulted in extremely challenging business conditions for the Cathay Pacific Group and commercial aviation in general,” it said in a statement.
“While there was some pick-up in the airline’s passenger and cargo businesses towards the end of 2009, overall there was a deep downturn in key markets which in turn led to sharply reduced revenues,” it said.
‘UNCOMFORTABLY HIGH’
Fuel prices reached “uncomfortably high” levels in the middle of last year, while Cathay and its Dragonair unit carried 24.6 million passengers last year, a 1.6 percent drop from 2008, Cathay said.
Cargo revenue tumbled almost 30 percent in the midst of “exceptionally weak” freight business during the first half of the year, it said.
In April, chief executive Tony Tyler said the global economic crisis hit Cathay harder than the SARS outbreak and the Sept. 11, 2001, attacks on the US.
In response, the company slashed flights and asked its 20,000 staff to take unpaid leave to deal with the slowdown.
Yesterday, Cathay chairman Christopher Pratt said weak demand for first-class seats and lower-than-usual sales remained a concern.
“While we welcomed the improvement in business in the latter part of 2009, we remain cautious about the prospects for 2010,” he said in a statement.
Cathay Pacific shares were up 1.9 percent to HK$14.8 in midday trading yesterday.
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