Message from the Chief Executive
Message from the Chief Executive
Posted On: 06 Aug 2008
Dear colleagues,
The extent of the impact high fuel prices are having on our business became very clear today. In our 2008 interim results we announced a loss of HK$663 million, which might seem hard to believe at a time when our revenues reached record highs. All the great work of the team has been eroded by a factor that is, to a large extent, out of our control.
These are certainly tough times for our airline – and of course for the industry as a whole. And things will stay tough if fuel prices stay at such high levels. True, there’s been a dip in the price of crude in the past couple of weeks, but jet fuel prices remain close to historic highs and we expect them to stay there for a while. We’ve seen a very sudden reversal from the record results of last year.
Our interim results show that that the revenue-generation aspect of our business remains very strong. Our performance on the passenger side, for example, was terrific, with revenue rising by almost 22% over the same period last year and passenger numbers up by 13.7%. Cargo did better than expected, too, with income up by 10.4% and tonnage rising by 6.8%. Well done the sales teams, who are rising to the challenge of pushing up revenue in the face of soaring fuel costs.
This example makes me confident about the long-term future of our airline – the strong team spirit we have here combined with fundamental strength of our business. We have strong finances, a great network, a powerful brand and intense customer loyalty, excellent product and service, an efficient fleet and a good order stream of aircraft. We operate from the world’s best airport in a city that’s a true aviation hub. These elements put us in a very good position to survive the current crisis – though we will need to work together as a team and share the pain if necessary.
The situation looks bleak right now but there will be an end to the crisis. At some point fuel prices will stabilise or even begin to edge down and meanwhile we will be raising fares to levels at which we can make profits – although of course we will still be offering some good deals to keep demand lively.
The important thing now is to ensure we’re ready to make the most of any opportunities that arise. That means working together to contribute as much as we can to the success of the company. We have been through crises before and we have always emerged stronger. Some airlines won’t survive the fuel crisis but Cathay Pacific can and will, as long as we all pull in the same direction. Our plan is to maximise the revenue-earning potential of our business. This means we must maintain our powerful network and make sure we continue to excel at service to our customers. Our aim is to keep our team together, as we have in previous difficult times.
Thank you all once again for your hard work in the first six months. Let’s hope we start to see an improvement in our fortunes in the second half. But let’s remember that while we can’t do much about fuel prices, 20,000 Cathay Pacific people working well together can make a big difference.
Best regards, Tony Tyler Chief Executive