Cathay Pacific has posted an 83% fall in profits citing lacklustre premium sales, continued weak cargo demand and higher fuel costs. The carrier made a net profit of HK$916m ($118m) in 2012, down from HK$5.5bn for 2011.
"Premium class yields were affected by travel restrictions imposed by corporations," Christopher Pratt, chairman of Cathay Pacific said in a statement. "Economic uncertainty, particularly in the eurozone countries, and an increasingly competitive environment added to the difficulties." Mr Pratt added that high fuel costs had hurt Cathay's profitability, especially on long-haul routes, which it said were dominated by "older, less fuel-efficient, Boeing 747-400 and Airbus A340-300 aircraft".
Cathay has taken various steps in recent months, including offering unpaid leave to its cabin crew, reducing capacity on some long-haul flights and retiring less fuel-efficient planes, in an attempt to cut its costs.
Airline Economics citied in March 2012 that Cathay Pacific was the airline to watch and worry about. There is no room on the ultra-competitive Europe/Asia routes at this time for 747-400s and A340s. Cathay needs to bring in new aircraft fast and contract now to grow once again in the future with a lower cost base. The clock is ticking but given the woes that Cathay has the net profit announced today remains most impressive indeed.
Cathay Pacific reports 83% drop in annual profit
