[photopress:Cathay_Pacific_Cargo.jpg,full,alignright]For Cathay Pacific the seriously competitive market is cargo, not passengers. It reported a 55% increase in profit – net income $330 million compared to the $281 million median forecast in a Bloomberg News survey of four analysts – and overall sales climbed 28% to $4.4 billion.
Cathay Pacific and its Dragonair unit carried 11 million passengers in the first half, 1.3% more than a year earlier. The two airlines filled 78.1% of seats, compared with 77.7% a year earlier.
But Cathay Pacific said its cargo yield, or average rate per shipment, fell 8.3% in the first half. The drop came amid increasing competition from Deutsche Lufthansa, Singapore Airlines and other carriers that have set up ventures in China. Cargo revenue accounted for 21% of the airline’s revenue in the first half.
Everything else seemed pretty rosy. Cathay Pacific added 21 routes into China, the world’s second-largest aviation market, with the purchase of Hong Kong Dragon Airlines.
Back to freight. Cathay aims to add at least 11 more freighters by the end of 2009 and to form a Shanghai cargo venture with Air China by the end of the year.
The Shanghai-based venture would let Cathay Pacific fly cargo from China directly to the United States and Europe instead of via Hong Kong.
Cathay Pacific ranked behind only Korean Air Lines, Lufthansa and Singapore Air in terms of international cargo traffic in 2005, according to the International Air Transport Association.
Chief Executive Officer Tony Tyler said at a press conference, ‘To get the yield up in cargo is a difficult task. We are in a very competitive market. We are very confident in the long run about cargo as an element of our business.”
Sources: International Herald Tribune and Bloomberg