Cathay Pacific Posts HK$1.26 Billion Loss

Cathay Pacific has posted a loss of HK$1.26 billion for last year, marking the first back-to-back annual loss in the airline's 71-year history.

It is more than double the HK$575 million loss recorded in 2016 and comes despite a HK$790 million profit recorded in the second half of 2017.

Cathay said it is still dealing with a fundamental structural change in the industry, with increased competition from other local airlines and mainland and Australian carriers.

It said it has started to see positive results from a three-year transformation programme.

The airline also said it has benefited from strong cargo business, a weaker US dollar, and improved premium class passenger demand.

Fuel-hedging losses were reduced last year. Total fuel costs increased 11 percent to more than HK$31 billion.

Cathay chairman John Slosar put on a brave face, saying positive trends from the end of 2017 have continued into this year.

"I think it's fair to say that the trends of the second half of the year were better than the trends of the first half. That was maybe partly the market, because it was a stronger market. Aviation generally correlates with the world economy and the world economy really seemed to pick up a bit in the second half of the year," Slosar said.

"It was also due to a lot of the work we've been doing in transformation. It's always hard to say whether trends will continue, but they've continued through the first couple of months of this year anyway, which is a good thing."

The airline's chief executive officer, Rupert Hogg, said their restructuring should help improve passenger yields.

"The transformation programme is about three things and they will impact on yield. One is about finding new sources of revenue, and this year we're going to launch seven new destinations. We haven't done that before, that's ambitious," Hogg said.

"The second is finding ways of adding more value to the customer and we've got lots of things planned. And the third is to make ourselves more productive."