LONDON — Cathay Pacific released its 2017 performance data, reporting that the group’s losses more than doubled because of rising fuel costs and relentless competition.
For Cathay Pacific and Cathay Dragon, the group reported an attributable loss of HK$1,259 million, coming from a loss of $HK575 million in 2016.
“Fundamental structural changes within the airline industry continued to create a challenging operating environment for our airline businesses in 2017,” said the airline via a public statement.
“In response, we took decisive action through our transformation programme to make our businesses leaner and agiler and more effective competitors.”
According to the release, the group’s focus in 2017 “was on building the right foundations, structure, and strategy to improve revenue and to better contain costs.”
Cathay claims that the factors that affected the group’s performance were mainly the same that affected the group in 2016.
“Overcapacity in passenger markets led to intense competition with other airlines and continued pressure on yields on many of our key routes,” the airline said.
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Cathay Pacific indicated that even though fuel prices were substantially higher, its fuel hedging losses decreased in 2017.
According to the airline, fuel remains as the most significant cost, which accounted for 30.7% of the airline’s total accounting costs in 2017.
The carrier’s passenger revenue in 2017 also decreased to HK$66,408 million, which is a 0.8% decrease compared to 2016. However, overall capacity increased by 2.8% in 2017 and the group’s load factor decreased by a small 0.1% to 84.4%.
Regarding cargo revenues, the group saw an increase of 19.1% to HK$23,903 million. The capacity also increased by 3.6% with load factors rising to 67.8%, which is a rise of 3.4% overall.
For 2018, the group is launching new services to Brussels, Dublin, Washington, Barcelona, Copenhagen, Cape Town, Nanning, and Jinan under its both brands (Cathay Pacific, Dragon)
This month, the carrier operated its first service into Tel Aviv from Hong Kong, marking a new step in partnerships between the two countries.
The group’s fleet will now be more expansive than ever before, with the addition of 12 Airbus A350-900 bringing the total number to 22.
September 2017 saw the carrier order 32 A321neo aircraft for the Dragon subsidiary, which will be delivered from 2020 onwards.
The carrier is also due to receive their first A350-1000 later this year, as it has just come out of the paint shop and requires engines and subsequent testing before delivery.
Overall, 2017 was not a positive year for the group, scoring some losses and increasing its costs in most of the areas of the company.
The only section which benefitted the most was the cargo end of the spectrum, which has had a significantly positive year.