Cathay parks up six planes

Cathay Pacific Airways Ltd., Hong Kong’s biggest carrier, intends to park six passenger planes by the end of the year after first-half sales slumped 27 percent.

“We still cannot see any signs of any pickup in business,” Chairman Christopher Pratt told reporters in Hong Kong .
One of the planes has already been parked along with five freighters, Chief Executive Officer Tony Tyler said.

Cathay has cut capacity, offered staff unpaid leave and begun talks about delaying new aircraft as business and leisure travelers pare flying because of the global recession. The airline ended a run of two straight losses in the first half on a HK$2.1 billion ($271 million) hedging gain and a 52 percent drop in fuel prices.

“Only a recovery in demand will help them make a profit in the second half,” said Allen Wong, an analyst at Quam Ltd. “It’s unlikely the carrier can save that much in fuel costs again as oil prices have already gone up a lot.”

Cathay has already parked the first of four Airbus SAS A340-300s that will be taken out of service, Tyler said. Two Boeing Co. 747-400s will also be idled, he added.

Passenger numbers at Cathay and its Hong Kong Dragon Airlines Ltd. unit fell 4.2 percent in the first half to 11.9 million. Passenger yield, a measure of average sales, plunged 20 percent, “slightly more” than Wong expected. Cargo volumes tumbled 15 percent.

The Hong Kong carrier’s gross fuel spending fell 56 percent in the first half from a year earlier to HK$8.65 billion. It bought fuel at an average price of $63.70 per barrel.

Source: Bloomberg.com