The Cathay Pacific Group has announced that its profit attributable to shareholders rose by 204 per cent in 2013 to HK$2,620 million (US$337.4 million), up from HK$862 million the previous year, according to Shipping Gazette.
Turnover for the year increased by 1.1 per cent to HK$100.48 billion.
The improvement in the group's performance last year was largely due to the strengthening of its passenger business and the positive impact of measures introduced in 2012 to protect the business from the on-going high price of jet fuel, a company statement said.
It said that the cargo business continued to be affected by strong competition and weak demand, though there was some seasonal improvement in the last quarter of 2013.
The share of profits from non-airline subsidiaries and from associates decreased to HK$781 million from HK$1,126 million.
"This mainly reflects the start up costs of Cathay Pacific's new cargo terminal, which became fully operational in October 2013, after a phased opening which began in February 2013. The results also continued to be affected by the performance of Air China Cargo, the airline's cargo joint venture with Air China," a group release said.
The group's cargo business has been adversely affected by weak demand since April 2011. There was some recovery in business during the last three months of 2013, though business was still weaker than the same period of 2012.
The group's cargo revenue in 2013 was HK$23,663 million, a decline of 3.6 per cent compared to the previous year.
Capacity increased by 1.7 per cent but the load factor fell by 2.4 percentage points to 61.8 per cent. Capacity was adjusted in line with demand throughout 2013 and more cargo was carried in the bellies of passenger aircraft in order to reduce costs.
Chairman Christopher Pratt said, "The cargo business continues to be problematic. There is still no sign of any sustained improvement in the market and some changes in the business appear now to be structural rather than cyclical. We thus have reduced the size of our freighter fleet and at the same time increased its efficiency."
The airline's new cargo terminal at Hong Kong International Airport became fully operational in October 2013 and "will allow us to improve efficiency and to reduce costs in the long term," the group said.
Passenger revenue in 2013 increased by 2.4 per cent year on year to HK$71,826 million. Capacity decreased by 1.8 per cent due to the continuation of 2012's reduction in long-haul frequencies and the accelerated retirement of Boeing 747-400 passenger aircraft.
The load factor increased by 2.1 percentage points to 82.2 per cent.
Fuel remains the group's most significant cost, accounting for 39 per cent of total operating costs in 2013.
In 2013 the group continued to upgrade its fleet, taking delivery of 19 new aircraft: five Airbus A330-300 aircraft (including one for Dragonair), nine Boeing 777-300ER aircraft and five Boeing 747-8F freighters.
Five Boeing 747-400 passenger aircraft were retired during the period.
In December, the airline announced an order for 21 new Boeing 777-9X aircraft for delivery after 2020, three new Boeing 777-300ER aircraft and one new Boeing 747-8F freighter, and to sell six existing Boeing 747-400F freighters.
As of the end of last year, the group had a total of 95 aircraft on firm order for delivery by 2024. Cathay Pacific and Dragonair are to take delivery of 16 new aircraft in 2014, one of which was delivered in January 2014.
Mr Pratt added, "We remain confident in Hong Kong's future as an air cargo centre and believe that our reshaped freighter fleet and our new cargo terminal will allow us to compete successfully in the long term. The business outlook for 2014 looks to be improved when compared to 2013."
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