Talks With HK Express Continuing, Says Cathay

Cathay Pacific remained tight-lipped on Wednesday about its negotiations to buy low-cost carrier, Hong Kong Express, as Cathay confirmed it returned to profit last year.

Chairman John Slosar told the media that Cathay is still in active discussions, as the company told the stock exchange last week, and it will be releasing details "as and when those are successful".

HK Express is a low-cost carrier that started operations in October 2013 and flies to regional destinations, many of them in Japan. Cash-strapped mainland conglomerate HNA Group controls HK Express.

Cathay stocks gained over 2 percent on Wednesday after it officially announced HK$2.34 billion profit last year, compared with a loss of more than HK$1.2 billion in 2017.

Revenue rose 14 percent to more than HK$111 billion while fuel hedging losses came down to HK$1.44 billion – from HK$6.37 billion in 2017.

But the airline said falling fuel prices in the last two months and the strength of the US dollar adversely affected income in the latter half of last year.

Slosar said the business outlook for this year is expected to remain challenging, with the forecast strength of the US dollar and uncertainty due to geopolitical discord and global trade tensions.

He said the airline will "compete hard" by extending its route network to destinations not currently served from Hong Kong.