Cathay Pacific on Wednesday said its 2011 net profit plunged 61 percent as it struggled with high fuel prices as well as softening demand for its cargo business, and warned of a challenging 2012. The Hong Kong flag carrier said it earned HK$5.5 billion ($709 million) last year, well below the record HK$14.0 billion profit it recorded in 2010, despite a 9.9 percent increase in total revenue to HK$98.41 billion.
"After a record year in 2010, we faced a number of major challenges in 2011," chairman Christopher Pratt said in a statement to the Hong Kong stock exchange, where the airline is listed. Passenger revenue for the year rose 14.2 percent to HK$67.78 billion. It carried a total of 27.6 million passengers last year, a rise of 2.9 percent from 2010, as demand for premium class travel remained robust.
The airline also noted weakened demand for cargo shipments from its two key markets, Hong Kong and mainland China, as well as the European market, due to falling exports amid weak consumer sentiment. Cargo revenue for 2011 was up 0.3 percent to HK$25.98 billion compared with 2010, but the load factor fell. Cathay Pacific shares were down 0.42 percent at HK$15.16 after the announcement. Pratt warned of a challenging year ahead, with pressure on Cathay's economy class yields and cargo business due to global economic uncertainties. Cathay has a fleet of 133 aircraft and, along with subsidiary Dragonair, flies to more than 160 cities.