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Cathay pulls it off – shares surge at likely profit turnaround

February 21, 2019 Headline News No Comments Email Email

Cathay Pacific’s struggle to turn itself around financially appears to have succeeded, with share prices jumping over 6.5% at news of what seems to be an impressive turnaround.

In a notice headed ‘Profit Alert’, the airline group advised yesterday that it anticipates a net profit for the 2018 financial year of HKD 2.3 billion (AUD 409 million).

That compares with a net loss in financial year 2017 of HKD 1.26 billion (AUD 224 million) when the airline group, formerly renowned for profitability, posted its first back-to-back losses in more than 70 years.

Cathay has been working hard to bring itself back into profitability.

Last August, Cathay’s chairman, John Slosar, commented: “We are halfway through our three-year transformation program, which is designed to make our businesses leaner, more agile and more effective competitors. The program is on track.  Despite higher fuel prices, we performed much better in the first half of 2018 than in the first half of 2017.”

The program appears to be working.

Cathay Pacific’s new A350-1000

The airline said in a statement yesterday that capacity growth and improved revenue management had helped its passenger business. Average airfares had risen in the face of competitive pressures.

“Capacity, yield and load factors increased.”

As well as its passenger role, Cathay is one of the world’s biggest cargo airlines. Its freight business was also strong in 2018, with rates up and volumes higher.

Cathay Pacific A350-900

The annual results are not yet final and the airline has cautioned that the final figure won’t be released until next month.

Written by Peter Needham

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