Cathay Pacific profits up 20%

The airline group said revenues increased in the second half of 2014 after seeing high fuel prices, reduced passenger yield and continued weakness and overcapacity in the air cargo market in the first half.    The Cathay Pacific Group reported revenues of $105.99 billion Hong Kong dollars (U.S. $13.67 billion) in 2014, up 5.5 percent from HK$100.48 billion the previous year. According to the airline group’s latest financial statements, profits attributable to the shareholders increased 20.2 percent to HK$3.15 billion for the year. The company increased earnings per share from HK$.67 to HK$.80.
   Cathay Pacific attributed the results to improved passenger and cargo business in the second half of 2014, after a first half that was affected by high fuel prices, reduced passenger yield and continued weakness and over-capacity in the air cargo market. 
   The group said it benefited from lower fuel prices in the fourth quarter, but this was partially offset by losses in its fuel hedging business.
   For 2014, Cathay Pacific increased cargo revenues by 7.3 percent toHK$25.4 billion compared to the previous year. The company introduced cargo services to Columbus, Calgary and Phnom Penh in 2014, and added Kolkata to its freighter network in March 2015.
   The group said it gave “substantial” injections of capital to its member line Air China Cargo in 2014 “to enable the carrier to buy new aircraft and improve the performance of its cargo business,” but admitted revenues from Air China were “below expectations” for the year. Cathay Pacific said Air China’s results were “adversely affected by a difficult operating environment and substantial exchange losses caused by the depreciation of the Renminbi in the early part of the year.”
   Cathay Pacific Chairman John Slosar said of the group’s results, “It was encouraging to see an overall improvement in our business in 2014. That improvement has continued in the first quarter of this year and we are positive about the overall prospects for 2015.
   “Demand in our cargo business continues to improve and is currently being helped by the congestion in sea ports on the West Coast of the United States,” Slosar added. “We continue to benefit from the lower net fuel prices. Our associates are also benefiting from these positive factors. While we face growing competition in our passenger business, which makes it harder to maintain yield, overall demand remains strong and the outlook is positive.”