Log in

View Full Version : Cathay Pacific Airways Says 1st-Half Profit Rose Higher-Than Expected 7.1%


CCA
7th Aug 2002, 11:56
Dow Jones Business News


HONG KONG -- Cathay Pacific Airways reported that its net profit jumped 7.1% in the first half, as the carrier's cost-cutting helped it weather the global economic slowdown and the effects on air travel after the Sept. 11 terrorist attacks on the U.S.
The net profit figure was sharply higher than expected. A Dow Jones Newswires poll of seven analysts suggested Cathay Pacific would report a 43% decline in net profit to HK$752.8 million. Forecasts ranged from ING Baring's HK$462 million to JP Morgan's HK$1.22 billion.

First-half revenue slipped to HK$15.51 billion Hong Kong dollars, compared with HK$15.84 billion.

Operating expenses slid more than 7% to HK$13.68 billion from HK$14.80 billion largely as a result of falling fuel costs and route expenses, it said.

The improved earnings were helped by lower fuel costs and rising passenger traffic, although a trend among passengers to fly economy rather than business class was hurting, the airline said.

"The result reflected a steady recovery in market conditions," Cathay said. " With more people traveling, the airline brought previously grounded aircraft back into service and restored services that were temporarily suspended following the terrorist attacks in the United States."

Hong Kong's flagship airline carrier said the outlook for the second half of the year was better than previously thought.

Meanwhile, Cathay's pilots union, the Hong Kong Aircrew Officers Association, met Wednesday to confirm the re-election of its president, Nigel Demery.

Cathay and its 1,300 unionized pilots have been feuding for more than a year over pay and scheduling practices. At the mostly administrative meeting held Wednesday, Mr. Demery said the pilots union did not discuss whether it would resume industrial action against the airline.

The pilots halted a four-month work-to-rule campaign in October without any concessions from management. Mr. Demery said the union could consider resuming labor action at their next meeting, planned for October.

"The pilots have not given up," Mr. Demery said. He said the pilots were trying to "just get [airline officials] to sit down and talk."

- This report was compiled from the Associated Press and Dow Jones Newswires.

Kaptin M
7th Aug 2002, 12:29
And share prices fell more than 7%! The cause cited..."the ongoing industrial problems with their pilots."

Why don't the public believe the management spin doctoring??!!

shortly
7th Aug 2002, 13:45
There have been four major companies posting far better than expected results over the last two days in HKG. Financial analysts anticipate shares in all those companies to rise sharply and the analysts have upgraded the annual profit forecast for all four - including CX. The burst on the BBC financial news did not even deign to mention the 'dispute'.

mole
7th Aug 2002, 13:56
Shorty,

I have asked you before and you have not answered. I ask again who are you? Your frequency of posting is higher than that of 411A. You are on this bulletin board 24 hours a day so you are obviously not a CX pilot. Who the hell are you?

6feetunder
7th Aug 2002, 15:33
http://news.bbc.co.uk/nol/shared/img/banners/ukfs_banner.gif

Cathay Pacific flies high

http://news.bbc.co.uk/media/images/38182000/jpg/_38182703_cathay2300.jpg
Cathay Pacific surprised the market with a rise in profits

Asian airline Cathay Pacific has surprised the market with an increase in profits for the first half of the year and an optimistic outlook for the second.
Cathay, Asia's fourth-largest carrier, reported a 7% rise in profits - against expectations of a decrease - and said a recovery in the US economy had boosted its cargo business.

The Hong-Kong based airline said strong demand had meant planes grounded after September 11 were brought back into service.

The carrier's capacity will increase further this year with the delivery of new planes and potential acquisitions.

However, the company is still involved in a dispute with its pilots' union, and there remains the threat of more industrial action.

Faster turnaround than expected

Shares in Cathay Pacific were up over 10% by the close of the Hong Kong market, after it reported profits of 1.41bn Hong Kong dollars (£118m; $181m) against expectations of 462-900m Hong Kong dollars.

"Airlines in the region may be performing better than their counterparts in Europe, and in particular those of the US."
Phillip Wickham, ING Barings

Chairman James Hughes-Hallett said the demand for business travel remained weak but was offset by a recovery in US manufacturing, which meant heavy export orders for the cargo division.

The company also benefited from a 20% reduction in fuel prices.

The turnaround cheered the market, particularly after Cathay reported an 87% plunge in profits in March, blaming the fall-out in business and first-class travellers.

Analyst Philip Wickham at ING Barings had expected a 65% drop in first half profits.

"Cathay's results certainly reflect the fact that airlines in the region may be performing better than their counterparts in Europe, and in particular those of the US," Mr Wickham said.

Increasing the load

Cathay Pacific said on Wednesday it was now considering buying further aircraft from maker Airbus within six to eight months.

"We anticipate continued demand in the coming months and an improved result in the traditionally stronger second half"
James Hughes-Hallett, Cathay Pacific chairman

Cathay has already ordered three long range aircraft for delivery by the end of this year, with six new regional planes to arrive by the end of 2003.

The chairman said the strong outlook followed a steady improvement in market conditions after the industry was battered by the September 11 terrorist attacks.

Mr Hughes-Mallett said on Wednesday: "Subject to unforeseen circumstances, we anticipate continued demand in the coming months and an improved result in the traditionally stronger second half."

Dispute also on the rise

However, Cathay's disagreement with its pilots continues.

The company's pilots union has threatened a further round of industrial action later this year which may disrupt flights.

The union represents most of Cathay's 1,600 pilots and is calling for discussion over pay and working hours.

The dispute has been going on since last July.

411A
7th Aug 2002, 22:22
Seems clear to all (except the AOA of course).

The investing public could not care less about the "problems" of the pilots (some, as in malcontents)...let the good times roll.

Another 49 in the wings? Most likely no, because the company management does not have too, the AOA is on the ropes already.

Will the AOA wake up...no, not likely either.:rolleyes:

shortly
8th Aug 2002, 02:44
6feetunder. Thank you for that. Nonetheless, I listen to the BBC radio and the blurb I listened to was on the way home from work last evening - after just a couple of beers in the gay bar. Was John Cartwright's farewell just wanted to shake his hand before he left. Mole, who the hell are you? What I do in my spare time is my own affair, do you want free rein for only pro-union rhetoric? I post here because here is where my interest is. My times on the net are fitted in around my work schedule - make of that what you will. I will continue to pursue a goal of moderation and negotiation before things get even worse.

Snake Hips
21st Aug 2002, 03:20
I want to work for ING Barings or indeed anyone else as an aviation analyst. What qualifications are needed? Does anyone know? It seems an ability to state the obvious is required together with a basic understanding airline economics e.g. if fuel prices rise, airlines costs could well increase.
Many thanks in advance

Cpt. Underpants
21st Aug 2002, 12:33
Interesting question...Try Jim Eckes, managing director of Hong Kong-based Indo-Swiss Aviation who frequently writes for the AW&ST re Hong Kong and the Far East. If/when you get a reply, would you mind posting it?

(Found and verified the chaps name)

VR-HFX
21st Aug 2002, 14:17
Snake Hips

Not all is at it seems. Fuel is substantially hedged with oil futures. Think we hedge more than 50% these days.

But as Mr Leeson (who put the ING into Barings) found out...the only perfect hedge is in a Japanese garden.

The only definite in aviation is if you push forward the hedge gets bigger, if you pull back it gets smaller and if you pull back too much it gets bigger again, very quickly.

Good luck in your career choice of stating the obvious, you will have lots of competition!