Cathay Pacific returns to profit after billion-dollar loss

Mar 10, 2010, 8:28 GMT

Hong Kong - Cathay Pacific bounced back to profit in 2009 after posting a record 1.1-billion-US-dollar operating loss in 2008, the Hong Kong airline announced Wednesday.

The airline reported a net profit of 4.7 billion Hong Kong dollars (605 million US dollars) in 2009 and said effective cost-cutting measures had turned its fortunes around.

Over the course of 2009, however, revenue declined by nearly 23 per cent to about 70 billion Hong Kong dollars (9 billion US dollars) as the impact of the global financial crisis continued.

In common with other airlines, Cathay Pacific saw business and first-class passenger numbers slip further in 2009 although economy class bookings held up well partly due to discounted prices.

Overall passenger numbers for Cathay Pacific and its sister airline Dragonair were down 1.6 per cent compared to the previous year, while freight carried by both airlines was down around 7 per cent by volume.

Passenger and cargo traffic picked up in the second half of the year but demand had yet to return to pre-slump levels, the airline said.

Cathay Pacific said cost-cutting measures such as voluntary unpaid staff leave and the sale of part of its stake in Hong Kong Aircraft Engineering Company had improved its bottom line.

Hedging on fuel prices also contributed to savings in 2009, sheltering the company from the worst of the year's price rises.

Chairman Christopher Pratt said he welcomed the improvement in the last months of 2009 but said he remained 'cautious' about prospects for 2010.

Cathay Pacific and Dragonair employ around 20,000 people in Hong Kong and around the world.