Cathay Pacific Airways’ profit fell 59 percent to $359.6 million in the first half of the year compared to the same period a year ago, as less demand from China and inflationary fuel prices dragged down earnings.
The Hong Kong-based carrier's cargo revenue increased 7.7 percent to $1.5 billion within the same period. Its load factor fell 9.6 percentage points to 88.4 percent over the same period.
“The Cathay Pacific and Dragonair cargo business performed reasonably in the first quarter of 2011, though demand out of its two most important markets, Hong Kong and Mainland China, weakened significantly from April onwards,” said a company statement. “The mainland China market was affected by a significant increase in competition, particularly on routes to Europe originating in Shanghai.”
Cathay said there had been strong demand on routes within Asia, and some capacity had been switched to these lanes from long-haul routes. Imports of high quality products to China via Hong Kong had also continued to increase, a trend that could gradually “help to reduce the imbalance between the volumes of cargo exported from and imported to Hong Kong”.
By the Numbers: 2009-2010 Asia-Pacific Airlines' Freight Traffic
“Our Japan cargo business did not weaken significantly following the earthquake and tsunami in March,” added Cathay. “However, these natural disasters did reduce the availability of hi-tech items made in Japan. This in turn affected manufacturing activities in mainland China and, consequentially, cargo shipments from Hong Kong.”