Hong Kong flag carrier Cathay Pacific Airways Ltd (國泰航空) yesterday said that its losses had narrowed in the first six months of this year, but added that global economic uncertainty would pose a challenge as the firm battles to revive its fortunes.
The carrier posted a net loss of HK$263 million (US$33.5 million), compared with a HK$2 billion loss for the same period last year.
However, it still fell short of some analysts’ estimates after being hit hard by rising fuel costs.
Cathay Pacific shares yesterday were down 1.82 percent at HK$11.86 in trading in Hong Kong.
The airline has come under pressure from lower-cost Chinese carriers and Middle Eastern rivals, which are expanding into Asia and offering more luxury touches.
In March, it booked the first back-to-back annual loss in its seven-decade history.
The firm had previously pledged to cut 600 staff, including one-quarter of its management, as part of its biggest overhaul in two decades.
Cathay Pacific chief executive officer Rupert Hogg took over in May last year, replacing Ivan Chu (朱國樑), who had been in the job for three years.
There was no specific reference to the possibility of further job cuts or restructuring yesterday, but Cathay Pacific chairman John Slosar said in a statement that the company’s “transformation program” would continue.
Hong Kong’s South China Morning Post last month reported that there would be a “consolidation” of the carrier’s overseas operations, prompting fears over further job losses.
The company yesterday confirmed that it was restructuring the organization 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 an e-mail to reporters, without giving further details.
Yesterday’s results missed a median estimate for a profit of HK$140 million in a Bloomberg News survey of five analysts.
Cathay Pacific 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 the year stood at HK$16 billion, compared with HK$14.9 billion in the same period last year.
Slosar predicted the airline’s performance would improve in the second half.
“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.”
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