Cathay Pacific Airways posted a HK$812 million net profit for the fiscal first half due to paper profits from its fuel hedging.
Net profit came in at HK$812 million ($105 million) for the six months ending 30 June compared to a net loss of HK$760 million for the corresponding period last year, the Oneworld carrier says to the Hong Kong stock exchange.
Revenue fell 27% year-on-year to HK$30.9 billion from HK$42.4 billion but the carrier posted a profit because "there were gains in fuel hedging contracts in the first six months of 2009 with unrealised mark to market gains of HK$2.1 billion," it says.
In the first six months of last year it posted losses of HK$7.6 billion on fuel hedges but said at the time that if there was any increase in fuel prices from the lows of 2008 it would result in Cathay posting a profit on fuel hedging.
Cathay says today that fuel "prices moved up rapidly in the second quarter" of this year.
Cathay's operating statistics show passengers carried fell 4.2% in the first half year-on-year to 11.9 million from 12.5 million.
The passenger load factor was down 1.5 percentage points to 78.5% from 80% and cargo carried fell 15% to 701,000t from 828,000t.
"Economy class demand remained fairly robust" due to discounts on air fares and "premium class passengers was significantly reduced" as companies cut back on travel, it says.
In May, Cathay reduced passenger capacity by 8% and cargo capacity by 13% and its subsidiary Dragonair reduced capacity by 13%. Cathay has cut no passenger destinations but Dragonair has cut six, it says.
The airliner has Boeing 747-8Fs, Airbus A330-300s and Boeing 777-300ERs on order according to Flight's ACAS database but the airline says it is "continuing to work with aircraft manufacturers with a view to deferring some of the deliveries."
Passenger traffic from southeast Asia was generally stable and Middle East traffic was robust.
But passenger demand from Europe was adversely affected by the weakening of European currencies, he says.
Demand from North America remains strong for economy passengers but demand for premium is greatly reduced, it adds.
Cathay also says its passenger traffic to Taiwan has been adversely affected by the opening of non-stop flights between Taiwan and mainland China and that passenger traffic from Korea and Japan is weak due to the depreciation of Korean won and concerns over swine flu respectively.
Cathay's financial results include those of its subsidiary Dragonair.
Source: Air Transport Intelligence news
