Cathay Pacific's first-half performance disappointing, CEO says

Cathay Pacific's first-half performance disappointing, CEO says

Cathay Pacific's operating environment remained challenging in the first half of the year, Chief Executive Officer Rupert Hogg said, dashing expectations of an early recovery for the carrier that’s cutting jobs following the first annual loss in eight years.

“We said that we expected the operating environment in 2017 to remain challenging,” Hogg said in a statement the premium airline sent to the stock exchange Tuesday.

“This has been the case. Our airline’s performance in the first half of 2017 continued to be disappointing.”

Cathay Pacific shares have rallied 23 percent this year as the airline embarked on a three-year transformation that included eliminating 600 jobs in the company’s biggest revamp in two decades.

Challenges at Hong Kong’s marquee airline and its rival Singapore Airlines show how some of Asia’s biggest airlines are faring amid intense competition from Chinese and Middle Eastern rivals, and a surge in capacity that is pummeling ticket prices.

Hogg said strong competition from other airlines is putting “intense and increasing pressure” on passenger yield, or the money an airline gets from carrying a passenger for a kilometer. The company’s annual passenger yield fell to the lowest level in seven years in 2016.

The carrier is scheduled to announce its first-half earnings mid-August.

Hogg took over as the airline’s chief in May, facing one of the toughest turnaround jobs in Asian commercial aviation. Once a dominant player in Asia’s premium air travel market with few serious rivals, Cathay Pacific has hit an air pocket, despite the booming travel demand in the region.

Cathay Pacific is expected to report a full-year loss of HK$1.44 billion (US$185 million) this year, according to the average estimate of 18 analysts compiled by Bloomberg.

 

9 comments

  • melbcollege

    melbcollege

    19 Jul, 2017 03:34 pm

    CX has some culture problem as well. It is not Chinese, not English. Passengers have choices to go with others in much cheaper price. SQ has similar problem as well, attitude. Stop the attitude!
    Member who gave thanks

    MikeAir

  • Michael Reade

    MikeAir

    19 Jul, 2017 03:51 pm

    Completely agree.  I ditched CX for a flight  on China Southern from PVG to LAX via CAN for sub 3K AUD in J class on the 380.  Seat and service was wonderful. CX was over AUD7K.  
    Members who gave thanks

    melbcollege, Cristian sorrel

  • alenb

    alenb

    19 Jul, 2017 04:23 pm

    when you charge so much even for regional flights that's what you get.......empty seats!!
    Member who gave thanks

    Cristian sorrel

  • cristian Sorrel

    Cristian sorrel

    20 Jul, 2017 01:47 am

    Late last year traveling from HK TO MEL
    Food poisoning on CX flight sick as... reported to the cabin crew (as vomiting) the crew was concerned to clean the area but not to ask me and not offered any assistance writing to CX IN HK to complain not any reply so far   Travel with CX for over 25 years their service have deteriorated in the last few years  
    No wonder why choosing another airline it's the answer to my problem. 
    No member give thanks

  • Say Mee

    mspcooper

    20 Jul, 2017 12:30 pm

    i have experienced the best service and great travels with CX. I agree that their price is dearer and they have to handle competition more now which would lead to some adjustment of their offering vs price. Just like anything, you can always get something cheaper. I would like to see them do well. 
    No member give thanks

  • moecat

    moecat

    21 Jul, 2017 03:46 pm

    You will all swap back to premium flyers when one of these cheap Chinese airlines drops to the ground in flames.... there are more reasons than what you can see for higher prices.

    Better trained Pilots 
    Better trained Mechanics 
    Better trained Cabin crew
    Better maintenance of aircraft 

    All this costs more money which in turn has to go on ticket prices.
    No member give thanks

  • Doubleplatinum

    Doubleplatinum
    Banned

    21 Jul, 2017 03:54 pm

    Spot on, well said.
    Member who gave thanks

    Merc25

  • featheast

    featheast

    16 Aug, 2017 10:59 pm

    It seems the market doesn't agree with what you said. 
    No member give thanks

  • moecat

    moecat

    16 Aug, 2017 11:09 pm

    Wait for the flames...
    No member give thanks

Guest

18 Jul, 2019 05:37 pm

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