HONG KONG, 9 August 2018: Hong Kong flag carrier Cathay Pacific said on Wednesday its losses had narrowed in the first six months of the year, but warned global economic uncertainty would pose a challenge as the firm battles to revive its fortunes.
The firm posted a net loss of HKD263 million (USD33.5 million), compared with a HKD2 billion loss for the same period in 2017.
But it still fell short of some analysts’ estimates after being hit hard by rising fuel costs.
The airline has come under pressure from lower-cost Chinese carriers and Middle East rivals, which are expanding into Asia and offering more luxury touches.
It booked the first back-to-back annual loss in its seven-decade history in March.
The firm previously pledged to cut 600 staff including a quarter of its management as part of its biggest overhaul in two decades.
Chief executive Rupert Hogg took over in May 2017, replacing Ivan Chu, who had been in the job for three years.
There was no specific reference to the possibility of further job cuts or restructuring Wednesday, but chairman John Slosar said in a statement that the company’s “transformation programme” would continue.
Hong Kong’s South China Morning Post reported last month there would be a “consolidation” of Cathay’s overseas operations, prompting fears over further job losses.
Cathay confirmed to AFP Wednesday that it was restructuring the organisation of its “outports”.
“An internal memo has been shared with the employees of the Cathay Pacific Group as our regional and country teams start to communicate and, where necessary, consult with their local teams on the restructuring,” it said in email to AFP without giving further detail.
Wednesday’s results missed a median estimate for a profit of HKD140 million in a Bloomberg News survey of five analysts.
Cathay said although its performance had been boosted by strong cargo business and a weak US dollar, it had been dragged by increased fuel prices.
Fuel is the group’s most significant outlay, accounting for 30.1 percent of total operating costs.
Fuel costs including hedging losses in the first half of 2018 stood at HKD16 billion, compared with HKD14.9 billion in the same period in 2017.
Slosar predicted the airline’s performance would improve in the second half of the year.
“The strength of the US dollar and economic uncertainty arising from global trade concerns remain challenges,” he said in a statement.
“But we still expect passenger yields to continue to improve and the cargo business to remain strong.”
© Agence France-Presse