Cathay Pacific profits jump 200%
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Cathay Pacific experienced soaring profits in 2013, as strong passenger demand and lower jet fuel bills boosted the airline.
The group generated profits of HK$2.62 billion (US$337.6 million) last year, 203.9% higher than the HK$862m profit it recorded in 2012. Revenues increased 1.1% to HK$100.48bn, including HK$71.83bn generated by the group’s passenger business. This marked a 2.4% increase compared to 2012 and came despite a reduction in capacity across the airline’s network.
In total, Cathay Pacific and Dragonair boarded 29.92m passengers in 2013, 3.3% up year-on-year. The airlines’ available seat capacity was reduced by 1.8%, allowing average cabin load factors to rise 2.1 percentage points to 82.2%.
Cathay was also able to reduce its fuel expenses in 2013. The company’s total jet fuel bill fell 4.6% last year, due to a series of measures including reducing capacity and replacing older aircraft with newer, more fuel-efficient models. It also took advantage of a brief drop in fuel prices in April 2013 to extend its fuel hedging strategy into 2016.
Despite this, Cathay said the price of jet fuel “remains a concern”, and it is still comfortably the group’s biggest expense, accounting for 39% of total operating costs in 2013.
“The operating environment remained challenging throughout 2013, for the group and the aviation industry as a whole,” said Cathay’s chairman, Christopher Pratt. “It was encouraging to see an improvement in our overall performance, and the strength of the passenger business reflects our continuing investment in network development and providing superior service and world-beating products. The cargo business continues to be problematic.
“We will continue to invest to make our business stronger while keeping our financial position strong,” he added.
Cathay and Dragonair took delivery of 14 new passenger aircraft in 2013, including five Airbus A330-300s and nine Boeing 777-300ERs. Five B747-400s were retired during the period. The two carriers are now expected to welcome of 16 new aircraft in 2014.
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