Cathay Pacific has hailed the progress of its transformation programme as it reported a more-than-threefold increase in operating profit for the first half of 2019, despite the impact of global trade tensions on its cargo business.
For the six months to 30 June it reported an operating profit of HK$2.47 billion ($315 million), a significant improvement on the HK$697 million result over the same period the year prior.
Operating revenue across the group was broadly flat at HK$53.5 billion, as a 5.6% rise in passenger revenue was offset by an 11% fall in cargo revenue.
Across its passenger operations ASKs climbed 6.7% and RPKs grew by the same magnitude, leaving passenger load factor steady at 84.2%. Yield, however, slipped 0.9% to HK$0.549 due to intense competition and currency movements.
Chairman John Slosar noted that on the cargo front, volumes and yield declined reflected "weaker global trade brought about in part by US-China trade tensions."
ATKs climbed 3.6% but RTKs gained only 0.4%, pushing cargo load factor down by 4.9 points to 63.4%. Cargo yield declined 2.6% to HK$1.88.
The group's attributable net profit was HK$1.35 billion in the first half of 2019, reversing last year’s HK$75 million loss.
In his outlook, Slosar noted that the group "normally achieve better results in the second half of the year than in the first half and, despite headwinds and other uncertainty, we expect this to be the case in 2019.”
However, he points to headwinds in the form of geopolitical and trade tensions continuing to impact demand for travel and air freight, while protests in Hong Kong have impacted forward bookings.
Nonetheless, Slosar says that the carrier is in its final year of a three year transformation project, it is "we believe that we are on track to achieve our objective of sustainable long-term performance."
He also commented on Cathay's recent closing of its acquisition of Hong Kong Express, which he said was a "new chapter" for the group.
"We intend to preserve what is unique and special about Hong Kong Express and to keep it as a low cost carrier, while at the same time broadening its network and maximising synergies with the rest of the Cathay Pacific group."