Cathay makes billion dollar loss in 2008

Cathay Pacific has just announced a bigger than expected loss for the full year of 2008, with a net loss of HK$8.6 billion (US$1.1 billion), despite a higher turnover and more passengers.
In a statement accompanying the results, the airlines comments on its record loss saying that in the first half of 2008, stronger consumer demand was challenged by record high fuel costs, and in the second half weakening demand and the global financial crisis hit its books hard.
“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,” says Christopher Pratt, Cathay Pacific Chairman.
He goes on to explain, “Passenger and cargo demand are expected to remain weak and, if fuel prices remain at their present levels, further losses on fuel hedging contracts will be incurred.”
Between Cathay Pacific and Dragonair, the airlines carried 25 million passengers in the full calendar year, 7.3% more than 2007.  This helped group turnover reach HK$86.6 billion dollars, an increase of 14.9% on 2007’s achievement of HK$75.4 billion.
At the same time as other airlines dramatically cutting capacity, Cathay was increasing it, recording a 12.7% increase in capacity.
“We have survived a number of crises in recent years and we remain confident that the Company will emerge in a strong position when the current difficulties are over,” adds Mr Pratt.
Cargo numbers continue to trend downwards, with total tonnage carried falling by 1.6%.  Earlier in the year, Cathay announced it would suspend construction of a dedicated cargo terminal at Hong Kong International Airport until 2011.

Source: Transportweekly