Cathay banks on freighter expansion
09 / 08 / 2012
CATHAY Pacific, the world’s largest international freight carrier, boosted first-half sales 13 per cent to HK$46.8 billion (US$6 billion). While volumes declined 4.4 per cent cargo revenue rose 7.7 per cent.
Operating profit before non-recurring items fell 44 per cent to HK$2.8 billion ($359 million) in the first half, from HK$5 billion a year earlier. Net income dropped 59 per cent to HK$2.8 billion after asset sales a year earlier.
The carrier has covered about 30 per cent of fuel needs for this year with hedging contracts and about 20 per cent of 2012’s requirements, finance director James Hughes-Hallett said.
Excluding hedging, Cathay’s fuel costs rose 49.5 per cent in the first half because of higher prices and increased flights.
More fuel will be needed for Cathay’s aggressive expansion plan. The carrier has ordered eight 777-200 freighters alongside 777-300ER passenger aircraft.
The 12 aircraft, which will have a list price of (HK$) 25.6 billion ($3.28 billion), are expected to be delivered between 2013 and 2016.
The aircraft will replace 21 747-400s and 13 A340-300s that the carrier is planning to retire by 2020.
Cathay’s first 777-200Fs will replace some of the 11 747-400BCFs in its cargo fleet. Cathay has 21 widebodies in its freighter fleet. Two of its 747-400BCFs will be sold to its cargo joint venture with Air China, while one or two more will be dry-leased to its all-cargo subsidiary Air Hong Kong.
Cathay will have 35 freighters by 2016.