HK Cathay Pacific profits plunge 61 percent

Published:  15 Mar at 6 PM

As reported by the BBC, Cathay Pacific’s profits have dropped 61% from one year earlier, as world economic uncertainty has hit cargo shipment and passenger travel demands.

The airline generated 5.5 billion Hong Kong dollars ($700 million; £450 million) in 2011, compared to HK$14 billion in 2010, the year when the firm was one of the globe’s most formidable airlines.

Rising prices of jet fuel also hit the airline's performance. The firm warned that 2012’s outlook would be even more challenging.

Christopher Pratt, Cathay chairman, said the airline was affected by uncertainty and instability among the globe’s major economies. He said its cargo business was hit hard by lower demand for exports from China, while the firm’s economy class services have also been under pressure. Its business class showed better performance.

Economic instabilities have continued to rock the first half of 2012, said Mr Pratt. If these challenges continue, the firm can expect pressure on cargo business and economy class sales, he added.

In effect, 2012 seems to bring more challenging than 2011, making the airline more cautious about this year’s prospects. Japan’s earthquake and tsunami, Thailand’s floods and the Middle Eastern unrest had also reduced passenger volumes on those routes, said Mr Pratt.

The drop in profits sent the airline’s shares lower. During afternoon trade, it was down 3 percent at HK$15.14.