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HK carrier Cathay Pacific returns to profit on fuel-hedging

CATHAY Pacific Airways Ltd returned to profit in the first half of this year thanks to fuel-hedging gains that offset shortfalls in their passenger.

The largest carrier in Hong Kong reported a net income of HK$812 million in the six months, compared with a loss of HK$760 million a year earlier, it said in a statement to the Hong Kong stock exchange today.

"The global aviation industry, hit hard by soaring fuel prices in 2008, is now having to confront one of the most severe demand downturns in living memory. There are cautious signs that the fall in demand has bottomed but there is, as yet, no indication when a sustained pick-up will begin," said Cathay Pacific Chairman Christopher Pratt.

The carrier's fuel-hedging contracts in the first six months generated mark-to-market gains of HK$2.1 billion, compared with a loss of HK$7.6 billion for the full-year 2008.

"The recent strengthening of fuel prices is a cause for concern. Cathay Pacific has taken appropriate measures to get through the current slump and will take further measures as necessary should the cost and demand picture not improve," he said.

The carrier and its subsidiary Dragonair delivered 11.9 million passengers in the first half, dropping 4.2 percent from a year earlier, according to the statement. The overall passenger load factor fell 1.5 percentage points to 78.5 percent.

Meanwhile, the amount of freight carried by the two carriers decreased by 15.3 percent to 700,693 tons, and cargo load factor fell by 0.2 percentage point to 66.2 percent.


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