Home TRAVEL Cathay Pacific’s Slosar Predicts More Business Travel This Year – Bloomberg

Cathay Pacific’s Slosar Predicts More Business Travel This Year – Bloomberg

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Cathay Pacific Airways Ltd. (293), Asia’s
biggest international carrier, expects an improving economy to
boost premium travel after slumps in cargo and finance-industry
demand for flights cut profit last year.

“The world economy is starting to look better, especially
North America,” Cathay Chief Executive John Slosar said today
in an interview with Susan Li on Bloomberg TV’s “First Up.”

Slosar’s introduction of promotional fares helped boost
passenger numbers 5 percent last year, while job cuts at banks
crimped premium travel and cargo demand slumped. Net income last
year dropped 83 percent to HK$916 million ($118 million) amid a
decline in freight demand and higher fuel costs, the company
said in a Hong Kong stock exchange filing yesterday.

“Business travel is expected to recover modestly this year
with the improvement in the world economy,” Geoffrey Cheng, an
analyst at Bank of Communications Co., said today by phone. He
raised his recommendation on the company to long-term buy,
citing better than expected 2012 profit, driven by cost cuts.

Cathay declined 1.3 percent to HK$14.02 at the close in
Hong Kong trading, the lowest level since Dec. 21. The city’s
benchmark Hang Seng Index rose 0.3 percent.

Barclays Plc analysts led by Patrick Xu cut Cathay’s share
price target by 4 percent to HK$15.41 yesterday after the
earnings were released. Daiwa Securities Group Inc. analysts led
by Kelvin Lau also lowered the target price.

‘Corporate Travel’

Sales at the front of the cabin, the most profitable
segment of the passenger business, fell short of Cathay’s
expectations in December, the airline said earlier this year.
Premium-ticket prices between Asia and the U.S. averaged $5,859
in December, the lowest level since 2009, according to data
compiled by Bloomberg.

“Corporate travel was hanging reasonably well last year
and all indications are that this year will be even better than
that,” Slosar said today. He said business demand hasn’t been
uniform across industries and has been hurt especially by a
decline in financial industry travel.

The carrier’s cargo yields last year were unchanged at
HK$2.42 after cutting capacity by 3.1 percent. Passenger yield,
including fuel surcharges, rose 1.2 percent to 67.3 Hong Kong
cents at the airline, according to the statement yesterday.

Faster global economic growth is “going to help revenue or
yields a little bit, but I think cargo is still patchy,” Slosar
said.

The worldwide air freight market shrank 1.5 percent in
2012, according the International Air Transport Association.

Cathay, which moves cargoes with 22 dedicated aircraft and
bellies of passenger planes, carried 1.56 million tons of cargo
and mail last year, 5.3 percent less than a year earlier, the
company said in January. Revenue, measured by weight multiplied
by kilometers, also fell 7.3 percent to 8.94 million.

To contact the reporter on this story:
Jasmine Wang in Hong Kong at
jwang513@bloomberg.net

To contact the editor responsible for this story:
Anand Krishnamoorthy at
anandk@bloomberg.net


Enlarge image
Cathay Pacific’s Slosar Predicts More Business Travel This Year

Cathay Pacific’s Slosar Predicts More Business Travel This Year

Cathay Pacific’s Slosar Predicts More Business Travel This Year

Jerome Favre/Bloomberg

John Slosar, chief executive officer of Cathay Pacific Airways Ltd., attends the company’s annual results news conference in Hong Kong on March 13, 2013.

John Slosar, chief executive officer of Cathay Pacific Airways Ltd., attends the company’s annual results news conference in Hong Kong on March 13, 2013. Photographer: Jerome Favre/Bloomberg

March 14 (Bloomberg) — Cathay Pacific Airways Ltd. Chief Executive Officer John Slosar talks about the company’s financial results and business outlook.
Hong Kong-based Cathay, Asia’s biggest international carrier, reported annual profit that beat analyst estimates after higher passenger numbers helped mask a drop in cargo traffic. Slosar speaks with Susan Li on Bloomberg Television’s “First Up.” (Source: Bloomberg)


Enlarge image
Cathay Pacific’s Slosar Predicts More Business Travel This Year

Cathay Pacific’s Slosar Predicts More Business Travel This Year

Cathay Pacific’s Slosar Predicts More Business Travel This Year

Jerome Favre/Bloomberg

A Cathay Pacific Airways Ltd. aircraft takes off from Chek Lap Kok Airport in Hong Kong.

A Cathay Pacific Airways Ltd. aircraft takes off from Chek Lap Kok Airport in Hong Kong. Photographer: Jerome Favre/Bloomberg

Cathay Pacific’s Slosar Predicts More Business Travel This Year – Bloomberg

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