Asia’s largest international airline sees its net loss double – so why is it happy with the results?
Cathay Pacific saw its net loss more than double to HK$1.25 billion (€130 million) in 2017, making it the airline’s first back-to-back loss in its 71-year history.
It was only earnings from subsidiaries and from its cargo business that prevented the loss from being much worse.
Asia’s largest international airline, which is due to start flights to Copenhagen in May, is currently in the process of being restructured.
In the wake of the loss for 2016, this is the company’s steepest loss in nine years as bad fuel hedging bets, one-off fines and redundancy costs dragged down results, the South China Morning Post reports.
Yet the results were better than some experts estimated and shares in the airline were trading higher following the news.
Revenues grew 5% to HK$97.2 billion but operating expenses increased 7% to HK$101.3 billion.
For its traditionally stronger second half of the year, the airline recorded a profit of HK$792 million, following a loss of HK$2.05 billion in the first half.
Unfortunately for the airline, one-off factors hit the earnings this year, including a European Commission fine of HK$498 million and HK$224 million in redundancy charges.
“We took decisive action through our transformation programme to make our businesses leaner and more agile and more effective competitors,” Cathay Pacific Airways chairman John Slosar said.
“Our focus in 2017 was on building the right foundations, structure and strategy to improve revenue and to better contain costs. Evidence of progress became apparent in the second half of the year.”