Asia’s biggest international carrier reported a surprise profit in the second half of 2017, with a pick-up in cargo and premium-travel demand helping narrow the full-year net loss to HK$1.26 billion (USD 161 million), well below analysts’ expectations for HK$2.26 billion, based on estimates compiled by Bloomberg.
Cathay shares climbed to the highest level in more than two years. The numbers came as a silver lining for Chief Executive Officer Rupert Hogg as a rebound in business travel and cargo demand contained the damage caused by past fuel-hedging contracts gone awry. Since taking the helm 10 months ago, Hogg has cut 600 jobs and taken delivery of newer aircraft to help Asia’s biggest international airline to become more competitive versus low-cost rivals and Chinese mainland carriers.
The number of passengers carried increased 1.4 percent. A slower rate of decline in passenger yields also supported the improved result.
Cathay still faces challenges from Chinese carriers, including China Southern Airlines Co. and China Eastern Airlines Corp. The competitors are adding more nonstop services to the U.S. and Europe, bypassing Hong Kong -- Cathay’s home base -- as a transit hub.
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