The Cathay Pacific Airways has pivoted to a first half 2019 profit, despite the sting of an 11.4 per cent drop in cargo revenue.
The airline reported an HKD 1.35 billion (USD 172.19 million) net profit for the six months ended 30 June, compared with a HKD 263 million loss for the first half of 2018.
Cargo revenue dropped, due in part to what the carrier says are ongoing US-China trade tensions, with a decline in both volume and yield.
The Group’s cargo revenue in the first half of 2019 was HKD 11.5 million, a decrease of 11.4 per cent compared to the same period in 2018. Flown cargo capacity of Cathay Pacific and Cathay Dragon increased by 1.1 per cent, principally due to additional belly cargo space in newly acquired passenger aircraft.
“Facing weak demand, we rationalised freighter capacity and emphasised shipments of specialist cargo,” the carrier says. Load factor decreased by 4.9 percentage points, to 63.4 per cent. Tonnage carried decreased by 5.7 per cent to 979,000 tonnes, while yield decreased by 2.6 per cent to HKD 1.88.
“Our airlines normally achieve better results in the second half of the year than in the first half and, despite headwinds and other uncertainty, we expect this to be the case in 2019,” says John Slosar, Cathay chairman.
“Geopolitical and trade tensions are expected to continue to affect the global economy and, in turn, demand for air travel and air freight.
The protests in Hong Kong have also had an impact on inbound passenger traffic in July and are adversely impacting forward bookings, he says.
“We expect the US dollar to remain strong. Fuel costs have recently weakened but we continue to expect fuel price volatility. Our transformation programme continues and we believe that we are on track to achieve our objective of sustainable long-term performance.”