Cathay Pacific profits plunge amid fierce competition
Hong Kong-based carrier Cathay Pacific has reported 82% drop in half-year profits amid fierce competition and economic slowdown in China.
The airline's net profit in the first half of the year dropped to HKD 353 million (USD 45.5 million), down 82% from the same period last year. Revenue fell 9.2% to HKD 45.68 billion.
Cathay is facing challenges on many fronts - air fares, competition from other carriers and fuel hedging losses. The airline attributed the sharp downturn to slower global economic growth dragging down corporate travel and hitting sales of lucrative premium class seats.
"The slowdown in the mainland China economy caused restrictions to be placed on corporate travel. This adversely affected premium class demand, particularly on long-haul routes," the company said in its report.
Carriers such as Air China and China Eastern are offering more direct services from the mainland, making it less attractive for passengers to travel via Hong Kong. There is also competition from Middle Eastern airlines such as Emirates, Etihad and Qatar Airways.
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