Cathay profit triples to HK$14.1 billion

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Cathay Pacific Airways has posted a net profit of HK$14.1 billion ($1.81 billion) for 2010, nearly tripling the HK$4.7 billion it posted in 2009.

Full year turnover grew 33.7% year-on-year to HK$89.5 billion from HK$67 billion.

Cathay and unit Dragonair carried 26.8 million passengers in 2010, up 9.1% from 24.6 million in 2009.

Cathay's passenger load factor rose 2.9 percentage points to 83.4%, and Cathay carried 1.8 million tonnes of cargo, up 18.1% from 1.53 million tonnes in 2009.

"Demand is expected to remain strong in 2011, but this expectation could be undermined if the current (or any higher) level of oil prices were to reduce global economic activity," says Cathay Pacific chairman Christopher Pratt.

"Capacity will increase with the introduction of new destinations and increased frequencies," he adds. "If our expectation as to demand is met, revenues will increase in line with capacity. Fuel costs are now higher than was expected at the beginning of 2011. Other operating costs are expected to increase, some at a faster rate than revenue."

Cathay adds that its fuel hedging activities lost HK$41 million in 2010. "While unrealised mark-to-market gains of approximately HK$1 billion have been recognised in reserves. These gains, depending on intervening movements in the price of oil, will be released to the profit and loss account in 2011 and 2012 as the underlying contracts mature."

Cathay's financial results include those of its subsidiary Dragonair.