Cathay Pacific Cargo posts 3.4% rise in net profit

Hong Kong-based Cathay Pacific ong Kong’s Cathay Pacific Airways reported that cargo revenue for the first half of 2014 was up 3.4 per cent over the same period last year to HK$11.66 billion (US$1.5 billion).


Cathay Pacific Cargo posts 3.4% rise in net profit


Hong Kong-based Cathay Pacific ong Kong’s Cathay Pacific Airways reported that cargo revenue for the first half of 2014 was up 3.4 per cent over the same period last year to HK$11.66 billion (US$1.5 billion). But cargo yield for the group’s two airlines, Cathay Pacific and Dragonair, decreased by 6.9 per cent yearon- year as overcapacity watered down the impact of volume growth. Capacity increased by 10.8 per cent, while the load factor rose by only 0.8 percentage points to 63.2 per cent – still a very respectable number in the current environment.

Overall, the Cathay Pacific group’s profit rose to HK$347 million (US$44.76 million) for the first six months of 2014, compared to a profit of HK$24 million in the first half of 2013. Turnover for the period rose by 4.6 per cent to HK$50.84 billion.

A number of factors had a significant negative impact on the group’s business in the first six months of 2014, Cathay said. “The principal adverse factors were reduced passenger yield, continued weakness and over-capacity in the air cargo market, the continued high fuel price and a weak performance from an associated company, Air China.”

Overcapacity in the cargo industry remains a major concern and has made it difficult to increase rates resulting in an ongoing weak yield environment, noted the company. Cathay said both airlines continued to manage capacity in line with demand in the first half of 2014 and more cargo was carried in the bellies of passenger aircraft, reflecting increased use of widebodies, chiefly the B777-300ER aircraft.