Search

NEWS
AVIATION | Staff Reporter, Hong Kong
Published: 23 Apr 12
550 views


Costs becoming a drag on Cathay Pacific

Soaring costs threaten to clip the wings of Cathay Pacific Airways, Ltd.

Based in Hong Kong, the airline warned that it might have to idle aircraft and cut flights if weaker demand and high fuel costs persist.

"Fuel prices remain at crippling highs and our cargo business still shows no sign of any sustained pick-up," said Cathay Pacific Chief Executive John Slosar. "The recent turmoil in the Euro zone reinforces the fact that the world is still balancing on a knife edge.”

Cathay’s business has worsened over the last month with passenger yields (a key measure of passenger profitability) continuing to fall in economy-class.

The first- and business-class cabins, which have traditionally been Cathay’s most profitable business segments, have shown no signs of weakness, however.

The airline said that revenue growth in recent weeks has dropped well short of target has failed to keep pace with capacity growth. It said the recent development isn't a sustainable situation.

In March, Cathay reported a 61% drop in net profit for 2011 due to rising fuel costs and softer demand for its freight services. It expects continued weakness for its cargo operations in 2012.

Also last year, Cathay fuel costs, which accounted for over 40% of its total operating costs, rose 38% to HK$39 billion from HK$28 billion in 2010.



Sign up for our newsletter

 

Do you know more about this story? Contact us anonymously through this link.

Click here to learn about advertising, content sponsorship, events & rountables, custom media solutions, whitepaper writing, sales leads or eDM opportunities with us.

To get a media kit and information on advertising or sponsoring click here.

Tags: Cathay Pacific Airways, Ltd., John Slosar

LATEST AVIATION JOBS »
PRINT ISSUE »

Subscribe Now
HK tweaks insurance regulatory regime

2 views

Choosy Chinese shop elsewhere

1 view

HK entrepreneurs urged to ride the franchising tide

5 views

MOST READ EXCLUSIVES

Here's how a startup aims to market ‘kezhans’ digitally

Here\'s how a startup aims to market ‘kezhans’ digitally

This company has built SaaS digital marketing systems for boutique hotels.

by STAFF REPORTER
9 Jun 2015 | 1134 views
 

A room for video games at GoAnimate’s new office

A room for video games at GoAnimate’s new office

Check out the interior photos.

by STAFF REPORTER
9 Jun 2015 | 950 views

Le Slip Francais brings its fun and authentic French brand in Asia

Le Slip Francais brings its fun and authentic French brand in Asia

And Hong Kong is its new home.

by STAFF REPORTER
16 Jun 2015 | 818 views
 

Boxful: No more cramped spaces

Boxful: No more cramped spaces

This company enters Hong Kong storage wars.

by STAFF REPORTER
23 Jul 2015 | 288 views
close Don't Show Again

STAY INFORMED! Get our free weekly newsletter