Frugal Cathay returns to profit
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The Cathay Pacific Group returned to the black in the first half of 2013, as cost-cutting measures boosted the airline.
Company profits recovered to a modest HK$24 million (US$3.1m) in the six months to 30 June 2013, compared to the loss of HK$929m loss it recorded in the same period last year. Revenues actually dipped 0.6% to HK$48.58 billion, but the positive result was achieved by Cathay’s cost-reduction and capacity management initiatives.
Changes to flight schedules, reduced capacity and the retirement of older, less fuel-efficient aircraft helped Cathay achieve an 8.5% cut in fuel costs in the first half of the year. Jet fuel still accounts for 38% of the business’s total expenses however, and Cathay took steps to further manage this in the first half 2013, taking advantage of a dip in fuel prices in April to extend its fuel hedging into 2016.
“While we continued to operate in a difficult environment in the first six months of 2013, it was pleasing to see some improvement in our business,” said Cathay’s chairman, Christopher Pratt.
“This improvement mainly reflected stronger passenger business and cost reductions. Our financial position remains strong and we will continue to invest to make our business stronger. We will remain focused on our long-term goals while managing short-term challenges,” he added.
Pratt added that the outlook for the rest of 2013 “remains unclear”. Despite this, the airline said that all of the long-haul passenger services cancelled during the cost-cutting drive of 2012 would be reinstated by September 2013.
Cathay will also launch flights to the Maldives in October 2013 and Newark in March 2014, while Dragonair will commence a new seasonal service to Siem Reap in October 2013.
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