Cathay Pacific posted a strong first-half net profit of 2.58 billion Hong Kong dollars (330 million US) on August 08, exceeding expectations, and said they were ideally placed to benefit from China's growth.
Cathay said the record interim result for the six months to June - up 54.7 percent on the same period in 2006 - came on the back of continued strong passenger demand and despite a weak cargo market.
Analysts had forecast first-half to June net profit would fall within a range of 2.05 billion to 2.36 billion Hong Kong dollars, up from 1.67 billion posted in the same period last year.
"Passenger demand continued to be strong during the first half of 2007 and this was the main driver behind the 54.7 percent rise in interim profit," said the company's chairman Christopher Pratt.
Revenue was up to 34.63 billion dollars from 27.09 billion a year previously.
Chief operating officer John Slosar said the airline's strength remained the benefit it gained from its location close to a booming China, in the face of expanding services in Dubai and Doha. "We do not see it as the most major competition we face," he told reporters.
"We think our base in China gives us a major advantage. We think that will increase over time." The figures are the first six-month report to include numbers for Dragonair which was bought by Cathay last September, in a deal that included an increase in the company's share in Air China.
"I am pleased to say that we are seeing very real benefits from the integration with Dragonair," Pratt said.
Cathay carried 8.5 million passengers in the six-month period, a rise of 4.1 percent, while Dragonair boosted the total to 11 million passengers. Pratt said that an improved passenger yield of 10.9 percent - not including the Dragonair figures - came largely as a result of strong demand from first and business class passengers.
A recent rise in fuel prices meant they were only down 1.4 percent on last year's figures, Pratt said, although fuel surcharges helped offset that extra spending.
The figures were dented by the cargo performance. Although the tonnage carried increased 8.7 percent for Cathay alone, the cargo and mail yield dropped 8.3 percent to 1.55 dollars, with load factor down 1.4 percent to 66.3 percent.
"A slow-down in demand and increased competition lowered the growth of our cargo business," Pratt added. "Cathay expects the current cargo downturn to be short-lived and remains confident in the future of the airfreight industry in Hong Kong."
The company has recently announced new services to Australia, Canada and the United States, and said it would be improving its on-board facilities including first class suites and improved economy seats.