| Cathay Pacific Airways' 2006 net profit rises 24 percent |
HONG KONG, Mar 7 (AP) -- Cathay Pacific Airways Ltd., Hong Kong's biggest carrier, said Wednesday its 2006 net profit surged 24 percent, boosted by strong passenger demand and higher revenue from fuel surcharges, which partially offset higher jet fuel prices during the year.
"Business was strong in 2006, with passenger demand in particular holding up well," said Cathay Pacific Chairman Christopher Pratt.
"However, high fuel prices continued to have an impact, despite easing off a little in the latter part of the year," he said.
Cathay Pacific had a net profit of HK$4.09 billion (US$523 million; €399.24 million) in the year ended December, up from HK$3.30 billion in 2005, when its earnings fell 25 percent as a result of soaring jet fuel prices.
Revenue for 2006 rose to HK$60.78 billion (US$7.77 billion; €5.93 billion) from HK$50.91 billion a year earlier.
During the year, the airline carried 16.7 million passengers, up 8.4 percent from 15.4 million the previous year.
Overall traffic grew 9.3 percent to 71.17 billion revenue passenger kilometers, an industry unit that measures the total number of kilometers passengers paid to be flown.
The healthy growth in passenger traffic came as the airline's average passenger yields improved sharply from a year earlier, boosted by continued strong demand from premium first and business class customers.
The airline said that high fuel prices in 2006 continued to have a significant impact on its profitability. Though jet fuel prices had eased slightly in second half of the year, the airline's fuel costs for the year still jumped 29.7 percent from 2005 to HK$20.21 billion.
Fuel surcharges helped to partially offset the continued rise in fuel costs. Total surcharge income rose over 60 percent to HK$6.47 billion from HK$3.95 billion in 2005.
Cathay Pacific, which is 40 percent-owned by conglomerate Swire Pacific Ltd., bought out rival Hong Kong Dragon Airlines Ltd. in August for HK$8.22 billion. As part of the deal, Cathay Pacific also increased its stake in flag carrier Air China Ltd. to 17.5 percent, paving the way for increased cooperation between the two carriers.
Dragonair's operating results were incorporated into the parent's book between September and December last year. But during that period, Dragonair contributed net profit of just HK$28 million, as high fuel prices continued to eat into the China-focused carrier's profitability despite strong revenue, Cathay Pacific said.
"The synergies of (the Dragonair) deal will begin to emerge more significantly in 2007, though we expect to face challenges from ever-increasing competition and high, volatile fuel prices," said Pratt.
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