Cathay Pacific posts biggest loss in 9 years

SHANGHAI: Hong Kong’s Cathay Pacific Airways posted its biggest annual loss in nine years, which was slimmer than expected as a rebound in the cargo market helped offset fuel hedging losses and stiff competition for passengers.

Cathay reported yesterday a net loss of HK$1.26 billion (RM626.4 million) for 2017, wider than the prior year’s loss of HK$575 million but smaller than an average loss estimate of HK$2.15 billion drawn from 11 analysts polled by Thomson Reuters.

It reported an attributable profit of HK$792 million in the second half, helped by an improving cargo market and profits from subsidiaries and associates such as Air China, which offset its first half loss of HK$2.05 billion.

Still, it was Cathay’s second consecutive year of losses and its fourth since the airline was founded in 1946. Revenue grew 4.9% to HK$97.28 billion.

Stung by fierce competition from mainland Chinese and Middle Eastern rivals that have exacerbated its problems with overcapacity, Cathay last year launched a three-year turnaround programme that aims to make HK$4 billion in savings.

It has announced job cuts and plans to boost productivity including increasing the number of economy-class seats on Boeing 777 planes.

“We are confident of a successful outcome from these efforts,” Cathay’s chairman John Slosar said in a statement, referring to the turnaround programme.

“We also look to benefit from a slowing of the decline in passenger yields as global economic conditions improve. The outlook for our cargo business is positive and we will take best advantage of opportunities in the growing global cargo market.” – Reuters