HK's Cathay Pacific loses $1.1bn

Hong Kong airline says it is is bracing for an "extremely challenging" year ahead.

    Cathay Pacific is traditionally regarded as one of the world's most-profitable airlines [GALLO/GETTY]

    Pratt said that the tumbling oil price in the second half of 2008 had also caused heavy losses from hedging contracts taken out to protect it against the previously high cost of fuel.

    "Having made a painful adjustment to high fuel prices, the aviation industry now has to adjust to a severe economic downturn," he said.

    Tough year ahead

    Passenger numbers on Cathay Pacific and its sister airline Dragonair increased to 7.3 per cent to 25m in 2008, mainly due to strong demand in the first half of the year.

    But like many airlines Cathay is bracing for a tough year ahead with consumers expected to rein-in spending on air travel as a result of the global downturn.

    After announcing the loss on Wednesday the airline said it would look at cutting capacity to meet falling demand.

    "All passsenger routes are under review. When that is finished we will know which routes we can't operate," Tony Tyler, Cathay's CEO, told reporters at a news conference in Hong Kong.

    Cathay said it had seen cargo volume slide in the last quarter of 2008 as global demand for goods made in Hong Kong and southern China dried up.

    Cathay has long enjoyed a reputation as one of the world's most-profitable airlines and was last year ranked as the world's sixth largest carrier by stock market value.

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    How different voting systems work around the world

    How different voting systems work around the world

    Nearly two billion voters in 52 countries around the world will head to the polls this year to elect their leaders.

    How Moscow lost Riyadh in 1938

    How Moscow lost Riyadh in 1938

    Russian-Saudi relations could be very different today, if Stalin hadn't killed the Soviet ambassador to Saudi Arabia.

    The great plunder: Nepal's stolen treasures

    The great plunder: Nepal's stolen treasures

    How the art world's hunger for ancient artefacts is destroying a centuries-old culture. A journey across the Himalayas.