SINGAPORE: Cathay Pacific Airways Ltd. is set to end two years of losses resulting from intense competition in the region, as a revamp kicked off by the premium airline starts to yield results.
The Hong Kong-based carrier expects to report a profit of HK$2.3 billion ($293 million) for 2018, versus a loss of HK$1.26 billion the previous year, it said in a filing Wednesday, compared with an estimate of HK$934 million by analysts.
Better revenue management, a strong cargo business and growth in capacity contributed to the profit, it said.
Shares jumped as much as 6.6 percent in Hong Kong, their biggest intraday gain in almost five months.
Asia’s largest international airline has fired more than 600 workers and pared overseas offices and crew stations following a loss in 2016, its first in eight years.
The carrier is in the final year of its transformation program that is seeking to reduce HK$4 billion in expenses, while Chief Executive Officer Rupert Hogg has added more international routes and lured more travelers with better service offerings on board its flights.
“The company’s transformation programme has had a positive impact,” Cathay Pacific said in the filing.
Past fuel-hedging contracts gone awry and intense competition from mainland carriers including China Eastern Airlines Corp. and China Southern Airlines Co. resulted in losses in 2016 and 2017, prompting the restructuring.
Late last year, the carrier came under fire for the world’s biggest airline data breach, which it reported months after the sophisticated attacks on its computer network.
This month, Cathay Pacific said it is closing its cabin crew base in Toronto as part of the business review, potentially affecting 120 workers.
Earlier, it offered a voluntary retirement package to employees in Japan. Still, it plans to recruit more than 1,000 cabin crew in Hong Kong this year, the company has said.
Cathay Pacific, which is scheduled to announce its earnings next month, said it’s still in the process of finaliSing the group’s annual results. - Bloomberg
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