NICHOLAS IONIDES / SINGAPORE
Cathay Pacific Airways has confounded analysts' downbeat forecasts by reporting much larger first-half profits than expected.
The Hong Kong-based airline saw net profit for the six months to 30 June increase to HK$1.41 billion ($181 million) from HK$1.31 billion for the same period last year. The 2001 results also included a one-off gain of HK$452 million from the sale of shares in Equant.
Analysts predicted a fall of up to 65% in earnings. Early this year, Cathay was consistently issuing negative statements about traffic expectations, although recently it has been more bullish.
The improvement came despite a slight drop in turnover for the half year, to HK$15.51 billion from HK$15.84 billion. Passenger revenue fell by HK$542 million, but cargo revenue grew by HK$253 million, as a "revival in the US manufacturing sector stimulated strong growth in exports from Hong Kong".
Weaker cargo yields were "compensated by an increase in tonnage". The airline says passenger load factors were high during the first half, although demand for business travel "remained relatively weak", reducing yield.
Cathay says the results "reflected a steady recovery in market conditions", and it is upbeat about the second half of this year, traditionally its strongest period. Last year's second half was difficult, however, as a result of the downturn that followed the September attacks, and industrial action by pilots, which badly disrupted operations.
Cathay pilots are again threatening industrial action against the carrier in their long-running dispute over pay and rostering. Hong Kong Aircrew Officers Association (HKAOA) president Nigel Demery has told local media that pilots are to vote on a new plan for disruptions on 9 October unless the airline agrees to new talks aimed at settling differences. The HKAOA last year backed a strict "work-to-rule" campaign.
Cathay has refused to hold talks with the HKAOA, and Cathay pilots are pursuing a strategy of contract compliance, in which they are refusing to work on their days off.
Source: Flight International
