Cathay Pacific faces turbulence out of the air as well—with a huge loss in profits.
In the first half of 2017, Cathay Pacific Airways faced a huge loss: HK $2.05 billion, or more than US$262 million. The company said the reason for the loss had to do with low ticket sale revenue, higher fuel-related costs, and stiff competition. And the air lines is expecting a similar loss in the second half of the year – which would mark the first time the air lines has faced an annual back-to-back loss.
“Clearly it was a challenging first half and the performance of our core air liness was disappointing,” John Slosar, Cathay Pacific’s chairman, told the South China Morning Post. “We do not expect the operating environment in the second half of 2017 to improve materially.”
Slosar also noted that it hurt business to offer cheaper airfare in an effort to attract customers. Planes were still filling to 85 percent capacity, but it made no difference. That may mean more expensive seats in the future.
“What are we going to do? We are going to manage our revenue better,” Slosar told the South China Morning Post.
The airline also plans to work to increase value for customers on each flight, by investing in new planes, increasing wifi capability on long-haul flights, and upgrading business class dining.
Despite the loss on the passenger side of the air lines’s business, Cathay’s cargo business was up by 4.4 percent in the first half of the year and is expected to continue increasing in the second half.