Cathay Pacific pointed the finger at global economic uncertainty for a major profit slump and warned that 2012 is looking even tougher.
Profit in 2011 fell almost 61% to HK$5.5 billion (A$679m) with fuel costs also hammering the bottom line.
The carrier’s fuel bill climbed HK$12.5b, an increase of more than 44% on the previous year, chairman Christopher Pratt said.
Along with fuel, he listed the instability of the global economy, weakness in the cargo market, declines in economy yield, natural disasters in Thailand and Japan and unrest in the Middle East as factors in the profit fall.
“Looking ahead, economic uncertainties have continued into the first half of this year,” Pratt said. “While these uncertainties continue, we expect pressure on economy class yields and our cargo business in particular to remain weak. Fuel prices have risen further. As a result, 2012 is looking even more challenging than 2011 and we are therefore cautious about prospects this year.”
Demand for premium cabins in 2011 was “robust” and while economy loads were high it came at a price as long haul yields reduced.
On its south west Pacific routes, premium revenue climbed more than capacity, helped by the strength of the Australian dollar and the introduction of new business class product on the Sydney route.
But economy travel was “adversely effected” by increased competition as more carriers launched direct flights to and from mainland China.
Overall passenger revenue increased 14.2% to HK$67.7 billion (A$8.3b), capacity increased 9.2% and passenger numbers climbed 2.9% to 27.6 million.
