Cathay Pacific Group has announced its financial results for the 2016 fiscal year. Revenues decreased 9.4% to *HK$92,751m. The group made a net loss of HK$575m, which compares against a HK$6,000m profit made in 2015.
In its cargo business, which makes up just over 20% of its business by revenue, turnover was down 13.2% to HK$20,063m. This was despite load factor increasing 0.2% and overall tonnage increasing 3.1% in the year. Cathay cited strong competition, overcapacity and the suspension of Hong Kong fuel surcharges in the early part of the year as reasons for the fall in revenue. The group also said demand for European routes had decreased, though demand on transpacific routes grew slightly in the second half of the year.
John Slosar, Cathay Pacific Chairman, said “overcapacity is expected to persist”, but also acknowledged that the cargo business had experienced a positive start to 2017.
Cathay has announced a critical review of the business, where they will implement measures to improve revenues and reduce costs in the short term. In the long term, a three-year strategy will be implemented to increase agility and competitiveness.
Source: Cathay Pacific