Fuel hedging injects HK$2.1bn
The Cathay Pacific Group has posted a first half profit of HK$812m (€73m) despite a 27.1% drop in turnover year-on-year.
An operating loss of HK$765m (€68.7m) in the first six months to June 30 was turned around by unrealised fuel hedging gains amounting to HK$2.1bn (€188.8m).
The Group's first half profits are in stark contrast to last year's loss of HK$760m (€68.3)when falling demand hit results.
Overall, the Group's operating costs fell 32% to HK$29,315m (€2,632m) in H1 2009 from HK$43,088m (€3,868m) in the same period last year.
Cathay's fuel costs saw the greatest reduction at 65.6%, dropping to HK$6,645m (€597m) from HK$19,307m (€1,733m) due to a 51.9% drop in the average price of oil.
The Group, which owns and operates Cathay Pacific and Dragonair, said demand for premium seats had fallen as its corporate clients reduced or downgraded travel.
It said load factors in its economy class cabins remained high but low fares, due to strong competition, had hit revenues.
The Group also blamed the strength of the US dollar for a drop in H1 passenger yields of 19.7% year-on-year.
Cathay Pacific and Dragonair were unable to match an overall 4.2% drop in passenger numbers in the first half with capacity cuts of 2.1%.
Despite this year's low fuel prices, the cost of oil jumped sharply in May. Cathay said it was the largest monthly rise in ten years and exceeded government-approved fuel surcharges.
Cathay confirmed the delivery of two new B777-300ER aircraft and the grounding of six older passenger jets this year.
Cathay's chairman Christopher Pratt said there were "cautious signs" of a bottoming in the fall in demand but none of sustained growth.
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