Hong Kong's flag carrier Cathay Pacific Airways on August 09 posted flat net profits for the first half as high fuel costs offset a solid boost in revenues. The airline posted a net profit of 1.668 billion Hong Kong dollars (214 million US) for the six months to June, down slightly from 1.67 billion dollars in the same period last year.
The figure was in line with analysts' forecast of 1.49 billion-1.81 billion dollars.
The airline said fuel expenditure rose 30.4 percent to 8.7 billion dollars as the average price of fuel into plane increased 28.5 percent to two US dollars per gallon.
Cathay has imposed a series of fuel surcharges this year but that only partially offset the additional costs from high fuel prices, it said. Solid sales and strong demand for cargo services also failed to lift profits.
The airline said its turnover increased 13.4 percent to 27.1 billion dollars, with passenger revenue up 8.7 percent to 15.9 billion dollars and travellers number up 11.1 percent to 8.1 million.
Cathay carried 572,552 tonnes of freight during the period, up 10.6 percent, with cargo revenue up 4.9 percent.
Cathay Chairman Christopher Pratt said the airline's full year results should benefit from the acquisition of Dragonair although he cautioned it will continue to be heavily influenced by the price of fuel and related surcharges.
In June, Cathay announced it was taking over its smaller local rival Dragonair in a deal worth 8.22 billion Hong Kong dollars. It also announced plans to cement ties with Air China, the mainland's flag carrier.
The complicated cross-sharing deal will allow state-run Air China and Cathay Pacific code-share on all routes and operate others.
The agreement will not only give Cathay Pacific greater access to the booming Chinese market but will also enhance Beijing and Hong Kong as major Asian aviation hubs, allowing both parties to compete in a global marketplace.
On Wednesday, the airline reiterated its plan to build and operate its own cargo terminal at Hong Kong International Airport with an eventual planned annual capacity of five million tonnes.
"This will enable us to pursue our aggressive cargo growth plans, make significant cost savings, introduce product innovation and strengthen Hong Kong's position as a global logistic hub," Pratt added.
On fleet expansion, Pratt said Cathay is due to receive a third converted Boeing freighter next month after taking delivery of a Boeing 777-300 and a second Boeing 747-400 BCF, Boeing converted freighter in July.
He said Cathay has ordered a further two Boeing 777-300ER long-range passenger aircraft, with options on a further 20.
The group has also ordered six new Boeing 747-400ER, extended-range freighters, for delivery in 2008 and 2009.