Cathay Pacific Shares Head for Worst Year in 18
Dec. 23 (Bloomberg) -- Cathay Pacific Airways Ltd., Hong Kong’s largest carrier, is set for its biggest annual decline in at least 18 years on the city’s stock market after battling record fuel prices and then a recession.
The carrier fell 1.9 percent to HK$8.33 today, extending losses for the year to 59 percent. China Southern Airlines Co., Asia’s largest carrier by passenger numbers, has tumbled 81 percent in the city. Qantas Airways Ltd., Australia’s biggest airline, is heading for its worst year in more than a decade in Sydney.
Cathay Pacific, Qantas and other carriers have cut capacity, offered staff unpaid leave or fired workers as the global recession causes the first declines in international travel for five years. Fuel prices doubling in a year also boosted costs before a 67 percent decline in prices led to hedging losses.
“It’s been a bad year for stocks,” said Jack Xu, an analyst at Sinopac Securities Co. in Shanghai. “Airlines are losing passengers as a chain reaction from the economic slowdown.”
Cathay Pacific’s passenger numbers fell 2.2 percent last month. Its first and business-class sales plunged 26 percent in the week ended Dec. 13, the South China Morning Post said today, citing comments made by Chief Executive Officer Tony Tyler in an internal staff e-mail.
‘Scary’ Projections
Projections for the company’s business in the coming months are “scary,” Tyler said in the company’s internal magazine this month. Passenger numbers have fallen in two of the last three months.
“We’re facing very uncertain times and the mood has turned decidedly somber,” Tyler said.
The carrier posted its first half-year loss in five years in the six months ended June. It’s also forecast “disappointing” full-year earnings and a possible HK$2.8 billion ($361 million) loss from fuel-hedging.
“Cathay Pacific’s sales won’t recover until the second half of next year,” said Xu.
The company received 1,100 applications for unpaid leave from Cathay Pacific cabin crew in the first two weeks of the offer being made, according to the staff magazine. That’s equivalent to about 15 percent of the airline’s flight attendants. Cabin crew at the carrier’s Hong Kong Dragon Airlines Ltd. unit have also been offered unpaid leave.
The price of jet fuel, the biggest expense for most Asian carriers, hit a record $181.85 a barrel in Singapore trading on July 3. It closed at $59.25 yesterday after tumbling in line with falling oil prices.
Dec. 23 (Bloomberg) -- Cathay Pacific Airways Ltd., Hong Kong’s largest carrier, is set for its biggest annual decline in at least 18 years on the city’s stock market after battling record fuel prices and then a recession.
The carrier fell 1.9 percent to HK$8.33 today, extending losses for the year to 59 percent. China Southern Airlines Co., Asia’s largest carrier by passenger numbers, has tumbled 81 percent in the city. Qantas Airways Ltd., Australia’s biggest airline, is heading for its worst year in more than a decade in Sydney.
Cathay Pacific, Qantas and other carriers have cut capacity, offered staff unpaid leave or fired workers as the global recession causes the first declines in international travel for five years. Fuel prices doubling in a year also boosted costs before a 67 percent decline in prices led to hedging losses.
“It’s been a bad year for stocks,” said Jack Xu, an analyst at Sinopac Securities Co. in Shanghai. “Airlines are losing passengers as a chain reaction from the economic slowdown.”
Cathay Pacific’s passenger numbers fell 2.2 percent last month. Its first and business-class sales plunged 26 percent in the week ended Dec. 13, the South China Morning Post said today, citing comments made by Chief Executive Officer Tony Tyler in an internal staff e-mail.
‘Scary’ Projections
Projections for the company’s business in the coming months are “scary,” Tyler said in the company’s internal magazine this month. Passenger numbers have fallen in two of the last three months.
“We’re facing very uncertain times and the mood has turned decidedly somber,” Tyler said.
The carrier posted its first half-year loss in five years in the six months ended June. It’s also forecast “disappointing” full-year earnings and a possible HK$2.8 billion ($361 million) loss from fuel-hedging.
“Cathay Pacific’s sales won’t recover until the second half of next year,” said Xu.
The company received 1,100 applications for unpaid leave from Cathay Pacific cabin crew in the first two weeks of the offer being made, according to the staff magazine. That’s equivalent to about 15 percent of the airline’s flight attendants. Cabin crew at the carrier’s Hong Kong Dragon Airlines Ltd. unit have also been offered unpaid leave.
The price of jet fuel, the biggest expense for most Asian carriers, hit a record $181.85 a barrel in Singapore trading on July 3. It closed at $59.25 yesterday after tumbling in line with falling oil prices.
