Cathay Pacific (CX) has announced its first-half 2014 financial results, and reported a profit of HK$347 million (US$44.7 million) during the period.
While overall profit margins showed significant improvements over the HK$24 million (US$4.1 million) reported in the same period a year ago, CX says there are still a number of mitigating factors that negatively impacted the carrier’s performance.
Fuel costs remain the biggest expense for Hong Kong’s home carrier, with prices soaring by 5.2 per cent as compared to last year. With fuel accounting for 37.9 per cent of total operating costs, the airline has made an equity investment in US-based biofuel developer Fulcrum BioEngergy, as well as modernising its fleet.
During the first half of the year, CX took delivery of two Boeing 777-300ERs, two Airbus A330-300s and one Airbus A321-200 (for Dragonair). As the backbone of the carrier’s fleet, the new delivery of the B777-300ER has allowed CX to retire two more of its ageing and less fuel-efficient B747-400 aircraft.
The carrier has a further 90 aircraft on order, including the highly-anticipated arrival of the Airbus A350-900 and A350-1000 – the latter which CX will be the launch customer of. The airline is also looking to retire its A340 fleet in the future.
In addition, CX will sell six of its existing B747-400F freighters back to aircraft manufacturer Boeing by 2016. Cargo revenue has seen a slight bump by 3.4 per cent, and the group has stated that more and more cargo is being loaded into passenger aircraft, thereby justifying the increased use of the B777-300ER and the selling of the B747-400F.
Overall capacity has grown due to increased frequencies on existing long-haul routes (e.g. Chicago and Los Angeles), and the introduction of new services to Doha and Newark. Passenger loads have been healthy at 83.6 per cent, while long-haul services have been strong. However, CX has seen strong competition on certain Southeast Asian routes, which has adversely affected yields, causing them to fall by 3.5 per cent.
Finally in terms of products, CX has successfully installed the new generation business, premium economy, and economy class seats on all B777-300ERs and long-haul A330-300s. The installation of its new regional business product has also been nearly completed. Meanwhile, Dragonair’s new first class seat has been installed in 23 of its aircraft, with the first entering service back in February.
For more information, visit cathaypacific.com