Fuel hedging boosts Cathay’s first half

Fuel hedging boosts CathayÆs first half    Cathay Pacific's first half profit spiked to $104.7 million after losses of $98.1 million in the comparable period in 2008, the Hong Kong-based airline said Wednesday.
   The profit was primarily a result of a $270.9 million unrealized fuel hedging gain, with operating losses at $98.7 million before the fuel hedging gain and tax. Cathay said the cargo downturn caused a revenue decline of 27.1 percent to $3.9 billion.
   'Cargo demand was very weak,' Cathay said. 'The amount of freight carried by both (Cathay and sister airline Dragonair) decreased by 15.3 percent compared with the first half of 2008, to 700,693 tons. The cargo load factor fell by 0.2 percentage point to 66.2 percent. Capacity was reduced by 14.1 percent in response to the sustained fall in demand. Yield was under constant pressure for the whole six-month period and fell by 32.8 percent.'
   A drop in fuel prices compared favorably to the first half of 2008, but was still higher than previous years, Cathay said.
   'Prices moved up rapidly in the second quarter with May recording the largest monthly rise in 10 years,' the airline said. 'This increase in fuel cost was not matched by the fuel surcharges approved by the Hong Kong Civil Aviation Department. Cathay Pacific's and Dragonair's surcharges remain below those charged by most of the airlines' international competitors.'