Cathay declares air cargo business better than expected

IN a turnabout statement to the Hong Kong stock exchange yesterday, Cathay Pacific Airways declared the aviation business was doing unexpectedly well, air cargo especially so, which contradicted its earlier predictions made when announcing financial results in March,

Having outlined a bleak picture for air freight in March, Cathay said that today's "trading position has been strong, particularly on the cargo side. The improved cargo and premium passenger revenues, which became apparent in the last quarter of 2009 have continued into this year," said the statement.

"This means that, despite higher fuel prices, we expect strong financial results for the first half of 2010 and, if present trends continue, for the second half also," said the statement.

But Cathay warned "conditions can change rapidly in the airline industry. Our results would be adversely affected, and very quickly so, by a significant increase in fuel prices or any return to the recessionary economic conditions of 2008 and much of 2009."

In delivering financial results in March, Cathay chairman Christopher Pratt said: "We remain cautious about the prospects for 2010. Revenues and yields remain below levels experienced prior to the recent downturn and there has not yet been a sustained improvement in premium passenger demand, which accounts for a high proportion of total revenues. In addition, the cost of fuel, which rose steadily from the middle of 2009, remains stubbornly high and threatens to undermine profitability."

(Source: www.schednet.com)