Cathay profits up 54.7pc in first half, but airfreight suffers

Cathay Pacific Airways has announced a record 2007 first half profit of HK$2.5 billion (US$320 million), a rise of 54.7 per cent against the HK$1.6 billion profit last year.

But there was a 8.3 per cent drop in air cargo yield with tonnage only rising 8.7 per cent to 623,073 tonnes against a capacity increase of 15.7 per cent.

"Cargo yield was down, affected by extra capacity in the market to increased competition from marine transport" said a Cathay statement.

The strong result was driven by the passenger side while airfreight suffered from rising competition from air ocean cargo carriers.

Group turnover was up from HK$27 billion to HK$34.6 billion, a rise of 27.9 per cent, said a group statement.

Fuel expenditure for the first six months increased to HK$10.5 billion. Passenger and cargo fuel surcharges helped to offset the cost. Cost per available tonne kilometre (ATK) increased to HK$2.30 while the cost per ATK without fuel increased to HK$1.69 due to the higher unit cost of Dragonair.

Cathay Pacific's passenger revenue increased 14.6 per cent to HK$18.2 billion and the airline carried a record number of passengers in the first six months of the year, with an increase of 4.1 per cent to 8.5 million.

This was the first regular results report to include full figures Dragonair, which was acquired by Cathay Pacific Group last year as a wholly owned subsidiary.

"As part of the same deal Cathay Pacific enhanced its partnership with Air China and work is under way on a number of initiatives between the two carriers," said a statement from the airline.

Cathay Pacific is continuing to expand its fleet and added three more aircraft in the first half of 2007. A more significant growth in the fleet begins in the latter half of the year, with the arrival of two Airbus A330-300 regional aircraft in August and the airline's first Boeing 777-300ER, Extended Range, aircraft in September.

A total of 23 of these long-range passenger aircraft are on firm order from Boeing, with five joining the fleet before the year end. The airline is also expanding its freighter fleet with two more Boeing 747-400BCF, Boeing Converted Freighters, on order along with six new Boeing 747-400ERF, Extended Range Freighters, for delivery in 2008 and 2009.