Business

Cathay Pacific posts a surprise first-half loss

  • 8 August 2012
  • From the section Business

Cathay Pacific has posted an unexpected first-half net loss amid higher fuel costs and a drop in demand for corporate travel.

The carrier lost HK$935m ($120.6m; £77.2m) for the six months to June. Analysts had forecast a profit.

It had made a profit of HK$2.8bn during the same period last year.

The airline industry has struggled with higher fuel prices and slowing demand due to Europe's debt crisis and a slowdown in the US economy.

"Increased fuel prices significantly affected the profitability of our passenger services, particular on long-haul routes operated by older, less fuel-efficient aircraft," the carrier said in a statement.

Cathay said in May that it would start using more fuel-efficient aircraft and reduce its capacity to cut costs.

The Hong Kong-based carrier said that demand for premium class travel also fell during the period "as employees of major corporations started to travel less, in response to economic uncertainty."

Cathay shares traded in Hong Kong fell by more than 7% following its results.