Cathay posts 2nd highest profit ever
Associated Press, Hong Kong
Hong Kong's biggest airline Cathay Pacific Airways Ltd. on Wednesday reported its second-highest ever net profit thanks to stronger passenger and cargo traffic, although surging oil prices boosted its costs.
The airline's 2004 net profit jumped more than threefold to HK$4.42 billion (US$567 million), from HK$1.30 billion in 2003.
The figure was above analysts' forecast of HK$4.01 billion. But the company noted that last year's solid gains were partly due to a low comparison base with 2003 when air travel was devastated by severe acute respiratory syndrome.
Revenue rose 32 percent to HK$39.07 billion, from HK$29.58 billion in 2003.
Cathay attributed the growth in traffic to "improved world and Hong Kong economies." But it also said 2004 would have been the airline's best year on record had fuel prices not risen so sharply.
"Persistently high fuel prices along with greater regional and long haul competition will place further pressure on us to improve productivity and reduce unit costs," said Cathay's Chairman David Turnbull.
Fuel accounted for about 24 percent of Cathay's total operating costs, up from 20 percent in 2003.
Last June, Cathay began imposing surcharges on flights to help offset the impact of higher fuel costs. It now charges passengers $5.30 each way for flights within Asia and $15.00 for longer flights until March 31.
Cathay Pacific carried 13,663,958 passengers and 972,416 tons of cargo last year. It said passenger traffic was buoyed by new and more frequent services to key cities such as Beijing, Sydney and New York, while cargo traffic was lifted by demand for goods from China to Europe, Japan and the U.S.
Looking ahead, Cathay said its acquisition of a 10 percent stake in Air China Ltd. at its initial public offering late last year would strengthen its network connections to China.
Turnbull also said that the airline is expanding its network and fleet, with plans to operate more than 110 wide-bodied aircraft in two years.
Cathay Pacific resumed daily passenger services to Beijing in December 2003 after a 13-year hiatus in the mainland. The airline also resumed cargo operations in Shanghai and in Xiamen earlier this year.