Cathay Pacific's 2012 net profit slumps 83.3% on fuel prices, weak cargo demand

HONG KONG (AFP) - Cathay Pacific said its net profit last year plunged 83.3 per cent due to persistently high fuel prices and weak air cargo demand.

The airline said its net profit stood at HK$916 million (S$147 million), down from the HK$5.5 billion it recorded in 2011. Revenue rose 1 per cent to HK$99.4 billion from HK$98.4 billion in 2011.

"Economic uncertainty, particularly in the euro zone countries, and an increasingly competitive environment added to the difficulties," chairman Christopher Pratt said in a statement to the Hong Kong stock exchange. "It was a challenging year for the aviation industry generally."

Cathay said it carried a total of 29 million passengers last year, a 5 per cent rise year on year, but its premium-class business was affected by travel restrictions imposed by companies.

"The high cost of fuel made it more difficult to operate profitably, particularly on long-haul routes operated by older, less fuel-efficient Boeing 747-400 and Airbus A340-300 aircraft," Mr Pratt said.

He added that the cost of fuel, which accounts for 41.1 per cent of total operation costs, rose 0.8 per cent last year.

The blue-chip Asian airline in August posted a first-half year net loss of HK$935 million.