Cathay Pacific sees profits rise, orders planes

Cathay Pacific had announced its second major aircraft order in six months after revealing record profits earlier.

The Hong Kong-based carrier ordered 27 planes from both Airbus and Boeing in deals which could eventually be worth as much as $6.55 billion.

Cathay posted a net profit of HK$14.05 billion ($1.8 billion) in 2010, nearly triple the figure recorded in 2009. Moreover, year-on-year revenue increased by 33.7 per cent to HK$89.52 billion.

The airline – which includes regional subsidiary Dragonair - carried a total of 26.8 million passengers in 2010, a 9.1 per cent increase on the previous year.

However, 2011 would likely be challenging the airline warned announcing the results.

High oil prices and any potential slowdown in global demand were cited as potential causes of concern over the coming months.

“Aviation is a challenging and volatile industry,” explained Cathay Pacific chairman Christopher Pratt.

“The recent spike in oil prices following instability in the Middle East is a real concern.”

Aircraft Orders

Along with its financial results the Hong Kong airline also confirmed it had struck a deal with European aircraft maker Airbus to buy 15 A330-300s.

A separate agreement with US-based Boeing will see the carrier take ten 777-300ERs as it seeks to expand its fleet.

The deal also included leasing two more Airbus A350-900s from International Lease Finance Corporation, Cathay said, adding that all the models would be delivered before the end of 2015.

The total list price for the 27 planes was HK$51 billion ($6.55 billion) although they would “be acquired at a considerable discount, as is the usual practice in such transactions,” Cathay said.

“We made a remarkable recovery from the low point in 2008,” added Pratt.

The plane orders announced Wednesday come after Cathay booked its biggest-ever single purchase in September last year, buying 30 Airbus long-range A350 aircraft for a $7.82 billion list price.

The carrier now has a total of 91 new aircraft on order.