Cathay Pacific trimmed losses but still remained in the red in the first half of the year.
The Hong Kong-based group said the operating environment “remains challenging”.
Cathay Pacific and sister regional airline Cathay Dragon reported a loss of HK$904 million for the first six months of 2018, compared to a loss of HK$2.7 billion in the first half of last year.
Total revenue grew by 15.7% to HK$53 billion as passenger carryings rose by 1.9%.
Today’s results come mid-way through a three-year restructuring designed to make the airlines “leaner, more agile and more effective competitors”. This has involved the loss of 600 out of 3,600 head office jobs with consultation taking place with selected staff based in 100 offices worldwide.
Chairman John Slosar said: “The Cathay Pacific Group reported an attributable loss of HK$263 million ($34 million) for the first six months of 2018. This compares to an attributable loss of HK$2,051 million in the first half of 2017.
“Revenue generation was satisfactory during the first half of 2018, with passenger yield improving.
“We benefited from a weak US dollar during the early part of the period, but were adversely affected by significantly increased fuel prices.”
Total fuel costs soared by HK$3.6 billion, or almost a third year-on-year.
The first of 20 new Airbus A350-1000 aircraft was received in June, a larger version of the Airbus A350-900 aircraft already in the fleet.
The new aircraft will be used on a new service from Hong Kong to Washington DC in September and on other long-haul routes.
The group has 78 new aircraft on order for delivery over the next five years.
“These new aircraft will improve our fuel and operating efficiency and reduce our emissions,” Slosar said.
Looking forward, he added: “Our airlines usually perform better in the second half of the year than in the first half of the year. We expect this to be the case in 2018.
“The strength of the US dollar and economic uncertainty arising from global trade concerns remain challenges. But we still expect passenger yields to continue to improve and the cargo business to remain strong.
“Fuel prices are expected to be higher. Hedging losses will reduce but net fuel costs will increase. Our new aircraft will improve fuel efficiency and we expect to generate more ancillary revenue.
“Our transformation programme will continue. We believe that we are on track to achieve our objective of achieving sustainable long-term performance for our airline businesses.
“There is still much to do, but I am confident in our future.
“Cathay Pacific has been Hong Kong’s home airline for over seven decades. We remain fully committed to this magnificent city.
“We will continue to make substantial investments in the development and strengthening of Hong Kong’s position as Asia’s largest international aviation hub.”
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