[photopress:air_cx_profit_surge.jpg,full,alignright]Cathay Pacific Airways, Hong Kong’s largest airline, posted a better-than-expected 83% gain in second-half profit after flying more passengers to China and raising fares to cover fuel costs.
Sales rose 21% which suggests that much of the extra profit came from the fuel surcharge.
The carrier boosted sales in Hong Kong and China 32% last year after buying Hong Kong Dragon Airlines to add more flights in China
Pauline Dan, who helps manage $2.5 billion, including Cathay Pacific shares, at Manulife Asset Management, said, ‘The growth was strong last year because of surging travel demand and higher ticket prices. This year ‘will not be spectacular if oil prices continue to stay at high levels.’
For the full year, the airline paid an average of $91 a barrel for fuel, 6.5% more than a year earlier. The average price of jet fuel traded in Singapore rose 7.7% last year.
Cathay Pacific charged customer 20% more than a year earlier while, at the same time, saving from fuel hedging. Hedging allows airlines to lock in future fuel prices to protect against possible increases.
Cathay Pacific and Dragonair boosted passenger numbers 4.3% last year to 23.3 million. The airlines fly to about 20 mainland cities, including Beijing, Shanghai and Tianjin.