Cathay Pacific Airways reported a profit attributable to shareholders of HK$2,191 million for 1999, as against a loss of HK$542 million for 1998. Turnover rose 7.9% to HK$28,702 million. Total passenger numbers rose 2.1% to 10.5 million. This much-improved result reflected the sustained recovery of key Asian economies and the airline`s ongoing effort to improve productivity.
Passenger demand showed improvements across almost all routes, with particularly robust growth seen between Hong Kong and Korea, the Philippines and the United States. The passenger load factor was 71.4%, compared to 67.5% in 1998. Average fares, however, remained under pressure due to strong competition.
Cargo was the outstanding business of the year, setting a new record turnover of HK$8,391 million, up 20.6% on the previous year. Cargo now accounts for 29% of total turnover. Demand for air cargo was helped by the strong growth in Asian exports and the recovery of regional markets.
Cost targets were met in most areas, but were not helped by fuel prices which rose significantly in the latter part of the year. These are now a cause of concern, particularly if current levels are maintained.?The lowering of landing and parking charges at Hong Kong International Airport from January this year is welcomed and will help keep our costs at competitive levels.
“The encouraging results reflect both the improvement in the economic fortunes of Asia and the hard work of our staff in improving our competitiveness,” said Cathay Pacific Chairman James Hughes-Hallett. “We are responding to these new opportunities by expanding our modern fleet and looking to add new services and new routes.”
The year was an eventful one for Cathay Pacific. The airline launched its new frequent-flyer programme Asia Miles and its new global alliance oneworld in February. A new First Class was introduced in May. In June, pilot salary negotiations resulted in two weeks of flight disruptions. From July to September, Hong Kong experienced a number of severe typhoons, one of which resulted in the closure of the airport for 24 hours. In October, new uniforms were introduced and, in November, the airline`s new corporate headquarters Cathay Pacific City was officially opened.
During the latter part of the year, Cathay Pacific took steps to expand its fleet on signs that regional markets were poised for further growth. In October, three Airbus Industrie A340-300s were leased from Air China, and an agreement was signed to purchase two new Boeing 747-400 freighters. In December, the airline committed to the purchase of three new Airbus Industrie A330-300s. In February this year, an agreement was reached to lease one A340-300 from the International Lease Finance Corporation.
Mr Hughes-Hallett said: “With our new competitive cost structure we are now in better shape than we were before the economic downturn. We have every confidence in the future and we will continue to help strengthen Hong Kong`s position as Asia`s leading aviation centre.”