Cathay Pacific announces 2016 interim results

The Cathay Pacific Group reported an attributable profit of HK$353 million for the first six months of 2016. This compares to a profit of HK$1,972 million for the same period in 2015. 
Earnings per share were HK9.0 cents compared to HK50.1 cents for the first six months of the previous year. 
Passenger business
The Group’s passenger revenue in the first six months of 2016 was HK$33,413 million, a decrease of 7.8 percent compared to the same period in 2015. Capacity increased by 4.2 percent, reflecting the introduction of new routes and increased frequencies on other routes. 
Load factor decreased by 1.4 percentage points, to 84.5 percent. Revenue was adversely affected by the suspension (from February) of fuel surcharges, which remained suspended for the rest of the period despite a subsequent rise in fuel prices. Yield fell by 10.1 percent to HK54.3 cents, reflecting the suspension of fuel surcharges, strong competition and adverse currency movements.   
There was a significant reduction in premium corporate travel, particularly on long-haul routes. Revenue from long-haul routes declined compared to the same period in 2015, despite a 4.7 percent increase in long-haul capacity. 
Cargo business
The Group’s cargo revenue in the first six months of 2016 was HK$9,415 million, a decrease of 17.2 percent compared to the same period in 2015. The cargo capacity of Cathay Pacific and Dragonair increased by 0.6 percent. 
The load factor decreased by 1.9 percentage points, to 62.2 percent. Tonnage carried decreased by 0.2 percent . The overall market was weak during the period, although tonnage stabilised in the second quarter. 
Yield fell by 17.6 percent to HK$1.59, reflecting strong competition, overcapacity and the suspension (from April) of fuel surcharges. Demand on European routes continued to be weak and demand on transpacific routes weakened. India was one of the few routes where demand strengthened. The Group managed freighter capacity in line with demand and carried a higher percentage of cargo in the bellies of its passenger aircraft.   
Fleet
Cathay Pacific took delivery of its first Airbus A350-900XWB aircraft in May. A second was delivered in July and the third in August. The airline is scheduled to take delivery of further nine aircraft of this type during the remainder of 2016. The A350-900XWBs are fuel efficient and have the right range, capacity and operating economics for the Group’s requirements.
Cathay Pacific retired two Airbus A340-300 aircraft in the first half of 2016.  It will retire one more aircraft of this type in the second half of this year and will retire the remaining four aircraft of this type in 2017.