Alexa

Cathay Pacific posts record $1.1 bln loss for 2008

 Christopher Pratt, Chairman of Cathay Pacific Airways Ltd., reacts during a press conference in Hong Kong Wednesday, March 11, 2009. Cathay racked up...
 Christopher Pratt, Chairman of Cathay Pacific Airways Ltd., reacts during a press conference in Hong Kong Wednesday, March 11, 2009. Cathay racked up...

Hong Kong Earns Cathay Pacific

Christopher Pratt, Chairman of Cathay Pacific Airways Ltd., reacts during a press conference in Hong Kong Wednesday, March 11, 2009. Cathay racked up...

Hong Kong Earns Cathay Pacific

Christopher Pratt, Chairman of Cathay Pacific Airways Ltd., reacts during a press conference in Hong Kong Wednesday, March 11, 2009. Cathay racked up...

Cathay Pacific Airways Ltd. racked up its biggest loss ever Wednesday as bad bets on jet fuel costs and plummeting demand due to the economic crisis took a toll on Asia's third-largest carrier.
Hong Kong's flagship airline reported a loss for the 12 months ended Dec. 31 of about $8.6 billion Hong Kong dollars ($1.1 billion).
"The outcome is deeply disappointing," said Cathay Chairman Christopher Pratt. "Having made a painful adjustment to high fuel prices, the aviation industry now has to adjust to a severe economic downturn. Cathay Pacific expects an extremely challenging year in 2009."
The record loss, far worse than expected, compared to a profit of HK$7 billion ($900 million) for 2007 and was the airline's first annual red ink since the height of the Asian financial crisis in 1998. For all of 2008, revenue grew by about 15 percent to nearly HK$87 billion, the company said.
The market had expected a loss of HK$6.8 billion, according to analysts polled by Thomson Reuters.
With the global picture still worsening, Cathay executives said they expected demand and average fares to continue sliding in the coming year.
As a result, the airline was re-examining its entire operation and wouldn't rule out the possibility of cutting jobs, reducing its capacity and eliminating routes. There weren't any plans to tap the capital markets to raise cash, though that too couldn't be taken for granted.
"There are no sacred cows that we can't have a look at," Chief Executive Tony Tyler said in Hong Kong.
While Cathay had repeatedly warned its full-year results would disappoint, the scope of the losses added to the gloom that's descended over the global airline industry in the past year.
As with a number of carriers around the world, Cathay suffered massive losses from wrongway bets on contracts meant to hedge against spiking jet fuel prices during the first half of 2008. Paper losses on hedge contracts running from 2009 to 2011 have surged to HK$7.6 billion, the company said.
The second half was equally turbulent as passenger demand fell off sharply amid the accelerating global slowdown.
Passenger traffic at Cathay and its subsidiary Dragonair climbed 7.3 percent to 25 million last year compared to the previous year. But cargo volumes slipped 1.6 percent.
To cope with the downturn, Cathay has previously announced plans to park two freighters, offer unpaid leave to employees and possibly delay construction on a cargo terminal to cut costs.
The company had said previously said it would aim to keep passenger growth flat in 2009 and avoid cutting destinations, but the deteriorating outlook has prompted the company to review those plans.
Cathay shares traded 5.9 percent higher at HK$7.4 in Hong Kong trade Wednesday.


Updated : 2021-03-03 07:10 GMT+08:00