Category Archives: Cathay Pacific Airways

Cathay Pacific Airways announces its 2017 annual results, another loss

Cathay Pacific Airways Airbus A350-941 B-LRT (msn 137) YVR (Rob Rindt). Image: 941123.

The Cathay Pacific Group reported an attributable profit of HK$792 million in the second half of 2017, compared to an attributable loss of HK$2,051 million in the first half of 2017 and an attributable loss of HK$928 million in the second half of 2016. Cathay Pacific and Cathay Dragon reported an attributable loss of HK$1,538 million in the second half of 2017, compared to an attributable loss of HK$2,765 million in the first half of 2017 and an attributable loss of HK$2,580 million in the second half of 2016.

For 2017, the Cathay Pacific Group reported an attributable loss of HK$1,259 million for 2017. This compares to a loss of HK$575 million in 2016. The loss per share was HK32.0 cents in 2017 compared to a loss per share of HK14.6 cents in 2016.

Fundamental structural changes within the airline industry continued to create a challenging operating environment for our airline businesses in 2017. In response, we took decisive action through our transformation program to make our businesses leaner and more agile and more effective competitors. 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. Airline losses in the second half of 2017 were lower than those in each of the two preceding half years.

The factors which affected our performance were largely the same as in 2016. Overcapacity in passenger markets led to intense competition with other airlines and continued pressure on yields on many of our key routes.  Fuel prices were higher, but fuel hedging losses reduced.  As the year progressed we began to see positive results from our transformation programme and our business also benefited from a strong cargo business, a weaker US dollar, and improved premium class passenger demand.

The contribution from subsidiary and associated companies was satisfactory.

Passenger business

Passenger revenue in 2017 was HK$66,408 million, a decrease of 0.8% compared to 2016. Capacity increased by 2.8%, reflecting the introduction of new routes and increased frequencies on other routes. The load factor decreased by 0.1 percentage point, to 84.4%. Yield, which was under pressure for most of the year, fell by 3.3% to HK52.3 cents, albeit improving by 3.1% in the second half of the year compared to the first half.

Cargo business

The Group’s cargo business benefited from robust demand in 2017, with cargo revenue increasing by 19.1% to HK$23,903 million. The cargo capacity of Cathay Pacific and Cathay Dragon increased by 3.6%. The load factor increased by 3.4 percentage points, to 67.8%. Tonnage carried increased by 10.9%.  Yield rose by   11.3% to HK$1.77, benefiting from the resumption (from April) of the collection of fuel surcharges in Hong Kong and from strong demand.


Total fuel costs for Cathay Pacific and Cathay Dragon (before the effect of fuel hedging) increased by HK$5,147 million (or 27.0%) compared with 2016, due to a rise in the price of fuel and increased operations. Fuel is still the Group’s most significant cost, accounting for 30.7% of our total operating costs in 2017 (compared to 29.6% in 2016). Fuel hedging losses were reduced. After taking hedging losses into account, fuel costs increased by HK$3,159 million (or 11.3%) compared to 2016.  We were able to limit the increase in our cost per ATK (excluding fuel) to 0.9%, and hold our underlying cost per ATK (excluding fuel and before exceptional items) flat, despite a challenging cost environment. This reflected our transformation programme’s focus on productivity, efficiency and holding the growth in staff costs below ATK growth.

Congestion at Hong Kong International Airport and air traffic control constraints in the Greater China region continued to impose costs on the Group. We are doing more to improve the reliability of our operations.

Exceptional items

Several one-off factors impacted results in 2017. In March, the European Commission imposed a fine of Euros 57.12 million (equivalent to approximately HK$498 million) on Cathay Pacific following its decision that a number of international air cargo carriers, including Cathay Pacific, had agreed to cargo surcharge levels prior to 2007 and that such agreements infringed European competition law.  An application has been made to annul the decision. In the same month, Air China completed an issue of A shares and, as a result, Cathay Pacific’s shareholding was diluted. A gain of HK$244 million was recognised on the deemed partial disposal. In April, Cathay Pacific disposed of its interest in TravelSky Technology Limited at a profit of HK$586 million.

In November, Air Hong Kong agreed to enter into sale and leaseback transactions with DHL International in respect of eight Airbus A300-600F freighters and associated equipment.  Five of these transactions were completed in 2017. Three of them will be completed in 2018.  Cathay Pacific entered into an agreement with DHL International for Cathay Pacific to acquire from DHL International at the end of 2018 the 40% shareholding in Air Hong Kong that it does not already own, with the result that Air Hong Kong will become a wholly owned subsidiary of Cathay Pacific.  Air Hong Kong will continue to operate an agreed freighter network to destinations in Asia for DHL International under a new block space agreement between Air Hong Kong and DHL International for an initial term of 15 years commencing on 1st January 2019.

In the first half of 2017, we commenced a three-year corporate transformation programme, which is intended to address the fundamental competitive challenges we are facing in the current airline industry environment.  The programme has the goal of making our airlines more consumer focused and responsive, and in doing so increasing our revenue and containing costs. In 2017, we built the right foundations, strategy and structure. We reorganised our head office, and focused on containing costs and improving efficiencies. We appointed new management and leadership teams. The associated redundancy costs (of HK$224 million) have been recognised in 2017 staff expenses.


We introduced a service to Tel Aviv in March and seasonal services to Barcelona in July and to Christchurch in December. We increased frequencies to other destinations in response to demand. We stopped flying to Riyadh in March 2017. We will introduce services to Brussels in March 2018, to Dublin in June 2018 and to Washington D.C. in September 2018. We will start to fly to Barcelona all year round in April 2018. Seasonal services will be introduced to Copenhagen between May and October 2018 and to Cape Town between November 2018 and February 2019.  Cathay Dragon introduced a service to Nanning in January 2018 and will introduce a service to Jinan in March 2018.


We took delivery of 12 Airbus A350-900 aircraft in 2017 (top), bringing the total number of this aircraft type to 22 at the end of the year. In September, we ordered 32 Airbus A321-200neo aircraft for Cathay Dragon, to be delivered from 2020, and retired our final four Airbus A340-300 aircraft and two Boeing 747-400 BCF freighter aircraft. We wet-leased two Boeing 747-8F freighter aircraft in order to allow us to increase cargo capacity.

Cathay Pacific Chairman John Slosar said: “Our priorities for 2018 are our transformation programme, changing the way that we work so as to better contain costs which will strengthen our passenger business further. We are confident of a successful outcome from these efforts. We also look to benefit from a slowing of the decline in passenger yields as global economic conditions improve. The outlook for our cargo business is positive and we will take best advantage of opportunities in the growing global cargo market. Increased fuel costs are increasing operating costs and adversely affecting results. Fuel hedging losses are declining.

“We are improving our competitive position by expanding our route network, increasing frequencies on our most popular routes and buying more fuel-efficient aircraft. We have improved productivity and efficiency and at the same time we are improving our already high customer service standards.  We are proud of the quality, dedication and professionalism of our people.  They have my utmost respect and I would like to thank them for their hard work and commitment during a period of uncertainty. Difficult but necessary decisions have been made. We are acting decisively to make Cathay Pacific and Cathay Dragon better airlines and stronger businesses. We believe we are on track to achieve strong and sustainable long-term performance.

“Our commitment to Hong Kong and its people remains unwavering, as has been the case over more than 70 years. We will continue to make strategic investments to develop and strengthen Hong Kong’s position as Asia’s largest and most popular international aviation hub.”

Watch interview with CEO Rupert Hogg on Bloomberg: CLICK HERE

Photo Above: Cathay Pacific CEO Rupert Hogg (Cathay Pacific).

Top Copyright Photo: Cathay Pacific Airways Airbus A350-941 B-LRT (msn 137) YVR (Rob Rindt). Image: 941123.

Cathay Pacific aircraft slide show:


Cathay Pacific’s first Airbus A350-1000 rolls out of the paint shop in Toulouse

First Airbus A350-1000, out of the paint shop on March 6, 2018

Cathay Pacific’s first Airbus A350-1000 has rolled out of the paint shop in Toulouse, France on March 6, 2018.

Cathay Pacific will be taking delivery the first of these 20 aircraft by the middle of the year.

The Cathay Pacific Group, which already has one of the most modern fleets in the sky, is investing substantially in its future expansion and will be taking delivery of 79 new aircraft between now and 2024, including six Airbus A350-900s and 32 A321neo aircraft and 21 Boeing 777-9Xs.

The efficient A350-1000 will form an important part of our long-haul operations and will be deployed on our new route to Washington DC starting in September. The service to Dulles International Airport will become the longest on the Cathay Pacific network.

Copyright Photo: Cathay Pacific Airways Airbus A350-1041 F-WZGV (B-LXA) (msn 118) TLS (Eurospot). Image: 941184.

Cathay Pacific aircraft slide show:

Cathay Pacific and Air Astana to codeshare

"Expo 2017 - Astana Kazakhstan" sub-titles

Cathay Pacific and Air Astana has announced an agreement that will enhance travel options for Cathay Pacific customers traveling to and from Kazakhstan and for Air Astana customers traveling to and from destinations in Asia and Australia via the airlines’ hubs in Hong Kong and Almaty respectively.

Commencing on March 15, 2018, Cathay Pacific will place its “CX” code on Air Astana’s nonstop flights between Hong Kong and Almaty, the financial and cultural heart of Central Asia, as well as on connecting services between Almaty and Astana, the Kazakh capital.

Air Astana currently flies twice weekly between Hong Kong and Almaty, on Tuesdays and Fridays, but will be upping frequency by adding a third service, on Mondays, from March 25.

Cathay Pacific will also codeshare on Air Astana’s five weekly services between Bangkok and Almaty (going daily from March 25) and four weekly services between Seoul and Almaty, giving customers additional options for travel between Hong Kong and Kazakhstan.

Air Astana will place its “KC” code on selected Cathay Pacific services operating between Hong Kong and Sydney, Melbourne, Perth and Singapore.


Top Copyright Photo: Air Astana Boeing 757-2G5 WL P4-EAS (msn 29488) (Expo 2017) LHR (SPA). Image: 934651.

Air Astana aircraft slide show:


Cathay Pacific to open “The Deck” at Hong Kong

Cathay Pacific on February 27 unveiled The Deck, the airline’s newest lounge at Hong Kong International Airport, giving customers another great reason to arrive early, relax and pamper themselves before their flight.

Located close to gate 16 in Terminal 1 and designed in the signature style of Cathay Pacific’s award-winning lounges in Hong Kong and across its network, The Deck, which opens its doors to passengers on March 22, emulates a “contemporary living room” environment of understated luxury, helping customers to feel at ease and providing a sense of well-being.

Cathay Pacific Chief Customer and Commercial Officer Paul Loo said: “The Deck builds on the formula that has made our other new lounges around the world so popular with our customers.

“Investing in experiences that our customers value and consider important is at the heart of our product and service philosophy, and helps us differentiate ourselves from any other airline. We look forward to welcoming the lounge’s first passengers.”

The Noodle Bar

Like our other lounges, the dining experience is at the heart of The Deck, with the Main Lounge providing a range of self-service, freshly made international offerings. Not to be missed at The Deck is The Noodle Bar – an iconic favourite among Cathay Pacific customers.

Passengers who yearn for a taste of Hong Kong can choose from a selection of local classics, including wonton noodles in a hearty broth, fish ball noodles and a variety of dim sum and buns. Ready-to-order Asian delights, such as dan dan noodles and Japanese-style vegetarian noodles, are also available.

The Terrace

The Deck is distinct from Cathay Pacific’s other lounges at its home in Hong Kong for the fact that it sits on a balcony on the eastern side of the terminal building.

From The Terrace, an open-ceiling L-shaped verandah featuring both table and individual seating, lounge visitors can take in panoramic views of the airport’s apron, taxi-ways and northern runway whilst enjoying their choice from a wide variety of drinks and dining options.

At 823 square meters, The Deck has seating for 180 passengers and is fitted with designer furniture and lighting carefully selected for practicality, comfort and privacy, while the use of natural materials, plenty of greenery and artworks by local artists add to the lounge’s welcoming atmosphere.

The lounge is further equipped with a relaxation room zone featuring bespoke Solo chairs, as well as eight shower suites, washroom facilities and a range of comfortable seating throughout.

The Deck will join Cathay Pacific’s other lounges at HKIA – including The Bridge, The Pier Business and First Class lounges, The Wing Business and First Class lounges and The Arrival – in providing customers with a Life Well Travelled experience. Meanwhile, The Cabin will close on April 30.

Photos: Cathay Pacific.

Cathay Pacific to fly seasonally to Cape Town

Cathay Pacific Airways Airbus A350-941 B-LRD (msn 038) HKG (Javier Rodriguez). Image: 935957.

Cathay Pacific Airways has announced it will offer seasonal service from Hong Kong to Cape Town, South Africa starting on November 13, 2018. The new route will operate three days a week until February 18, 2019 with new Airbus A350-900 aircraft.

Copyright Photo: Cathay Pacific Airways Airbus A350-941 B-LRD (msn 038) HKG (Javier Rodriguez). Image: 935957.

Cathay Pacific aircraft slide show:

Cathay Pacific partners with Pure Yoga to bring yoga to the sky

Cathay Pacific has made this announcement:

Cathay Pacific has partnered with Pure Yoga to launch a new inflight well-being program, ‘Travel Well with Yoga’, this month. In harmony with the airline’s ‘Life Well Travelled’ campaign, the series of videos have been developed by esteemed Pure Yoga instructors to help passengers ease into their journeys with yoga and meditation exercises and tips. Passengers can now view ‘Travel Well with Yoga’ in English, Cantonese, Mandarin and Japanese across all Cathay Pacific and Cathay Dragon routes by accessing the Lifestyle section on their inflight entertainment screens.

Split into six easy-to-follow videos featuring founding teacher Patrick Creelman and senior instructor & co-founder Almen Wong, the series demonstrates yoga and meditation routines that can be done before, during or after a flight. Exercises are designed to improve circulation, enhance joint mobility and relax the mind for a comfortable and restful journey.

Cathay Pacific Entertainment, Platforms and Connectivity Manager Simon Cuthbert said: “We all know that sitting still for a long period of time can be uncomfortable. The need to get up, move and get your blood pumping is important during a flight. Yoga is an innovative way to do this. There are a series of exercises that can easily be done from an economy class seat whilst other moves are suitable for after the flight in your hotel. ”

Pure Yoga is also offering all Cathay Pacific Marco Polo Club members a complimentary 10-day trial, 50 per cent discount on studio joining fees, and a complimentary upgrade for access to all Pure Yoga studios across Asia.

Photo: Cathay Pacific.


Cathay Pacific to launch nonstop Hong Kong – Washington Dulles flights

Cathay Pacific Airways Airbus A350-941 B-LRD (msn 038) HKG (Javier Rodriguez). Image: 935957.

Cathay Pacific Airways is expected next week to announce a new nonstop Airbus A350-900 route linking its Hong Kong base and Washington (Dulles) according to the South China Morning  Post. The new route is expected to take under 17 hours.

Copyright Photo: Cathay Pacific Airways Airbus A350-941 B-LRD (msn 038) HKG (Javier Rodriguez). Image: 935957.