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Thu, Aug 05, 2010 - Page 10 News List

Cathay Pacific profit up, orders 30 Airbus planes

AP , HONG KONG

Cathay Pacific Airways Ltd said its first-half profit surged to HK$6.84 billion (US$881 million) as passenger numbers recovered from the recession.

The Hong Kong-based carrier, which also owns Dragonair, said yesterday the result compared with a profit of just HK$812 million in the first half of last year. Revenue jumped nearly 34 percent to HK$41.3 billion.

The company said ticket sales for its premium cabins were lifted by a “sharp increase” in business travel originating in Hong Kong.

Along with Dragonair, the two airlines carried 13 million passengers in the first half, up 8.5 percent from a year ago.

Cargo traffic also picked up, allowing the airline to bring back last month five cargo planes that were parked during last year’s downturn. The two airlines delivered 872,000 tonnes of freight in the first half, a 24.4 percent increase from last year.

Along with the strong results announcement, Cathay Pacific said it had signed a letter of intent to buy 30 Airbus A350-900 planes, pledging a commitment fee of US$4.5 million for the US$7.82 billion purchase of long-haul aircraft.

But the carrier also warned about the risk of growing fuel costs, noting that it paid 51.1 percent more for fuel in the first half.

“Our results would be adversely affected, and very quickly so, by a significant further increase in fuel prices or any return to the recessionary economic conditions of 2008 and much of 2009,” chairman Christopher Pratt said in a statement.

Unable to give shareholders a dividend last year, Cathay Pacific said it would issue an interim dividend of HK$0.33 per share.

The airline said the increase in direct flights between China and Taiwan amid warming ties continued to hurt its Taiwan business. The two sides agreed to increase the number of direct flights from 270 a week to 370 a week starting in June.

Flights to Bangkok were affected by political unrest in the Thai capital and Indian competitors drew passengers away from its services to New Delhi and Mumbai.

Meanwhile, the Shanghai World Expo boosted traffic to the eastern Chinese financial center and the World Cup increased travel to South Africa.

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