Cathay Pacific posts biggest loss in 9 years, but upbeat on outlook



Still, it was Cathay's second consecutive year of losses and its fourth since the airline was founded in 1946.

Net loss for the year ended December 31 was HK$1.26 billion ($160.6 million), compared with a HK$575 million loss a year earlier, it said in an exchange filing.

Asia's biggest worldwide carrier reported a surprise profit in the second half of 2017, with a pick-up in cargo and premium-travel demand helping narrow the full-year net loss to HK$1.26 billion ($161 million).

The group had an attributed profit of HK$792 million in the second half of 2017, improving from the HK$2.05 billion loss in the first half.

The second-half results were boosted by improved premium class demand and a strong cargo business, with Slosar saying an better global economic outlook also helped. Cathay has been booking losses on its hedges after crude oil unexpectedly tumbled from more than $100 a barrel in 2015.

"Whether they can regain the market share is really the key", Wong told AFP.

Companies such as China Eastern and China Southern Airlines are offering direct services to Europe and the United States from the mainland, while budget carriers have targeted regional travellers, undermining Cathay's position.

Fuel is the largest component of an airline's costs in Asia.

Cathay said passenger revenue decreased 3.5% in 2017, with passenger yield - the average amount paid per person per mile - dropping 3.3%.

It pledged to cut 600 staff including a quarter of its management as part of its biggest overhaul in two decades.

Ten months in the job, chief executive officer Rupert Hogg can reassure investors that a rebound in business travel and cargo demand have contained the damage caused by past fuel-hedging contracts gone awry.

The carrier has also been in long-running talks with pilots over compensation, housing benefits and pay freezes, with a strike targeting the year-end holidays averted in 2017. "Our priorities for 2018 are our transformation program, changing the way that we work so as to better contain costs which will strengthen our passenger business further".

"We are confident of a successful outcome from these efforts", Cathay's chairman John Slosar said in a statement, referring to the turnaround programme.