Cathay Pacific Group : turnover for the year increased by 1.1% to HK$100,484 million

The improvement in the Group’s performance in 2013 was largely due to the strengthening of its passenger business and the positive impact of measures introduced in 2012 to protect the business from the high price of jet fuel.

Passenger revenue in 2013 increased by 2.4% to HK$71,826 million. Capacity decreased by 1.8% due to the continuation of 2012’s reduction in long-haul frequencies and the accelerated retirement of Boeing 747-400 passenger aircraft.

However, capacity began to increase towards the end of the year as frequencies were restored and new routes were introduced.

The load factor increased by 2.1 percentage points to 82.2%, while yield improved by 1.8% to HK68.5 cents.

Passenger demand was strong on long-haul routes in all classes of travel. However, demand on regional routes did not match the increase in capacity on these routes, which left yield under pressure.

The price of jet fuel remains a concern for Cathay Pacific and the industry as a whole.

Fuel remains the Group’s most significant cost, accounting for 39.0% of total operating costs in 2013.

In April 2013 the airline took advantage of a brief drop in fuel prices to extend its fuel hedging into 2016. The Group’s fuel costs in 2013 (disregarding the effect of fuel hedging) decreased by 4.6% compared to 2012.

This was largely a result of the introduction, in 2012, of measures including changing schedules, reducing capacity, withdrawing older, less fuel-efficient aircraft from service and taking delivery of new, more fuel-efficient aircraft.

In 2013 Cathay Pacific continued to upgrade its fleet, taken delivery of 19 new aircraft: five Airbus A330-300 aircraft (including one for Dragonair), nine Boeing 777-300ER aircraft and five Boeing 747-8F freighters.

Five Boeing 747-400 passenger aircraft were retired during the period.

Also in December 2013, the airline announced an order for 21 new Boeing 777-9X aircraft (for delivery after 2020), three new Boeing 777-300ER aircraft and one new Boeing 747-8F freighter, and to sell six existing Boeing 747-400F freighters.

As at 31st December 2013 the Group had a total of 95 aircraft on firm order for delivery by 2024.

Cathay Pacific and Dragonair are to take delivery of 16 new aircraft in 2014, one of which was delivered in January 2014.

The Group continued to develop its networks in 2013. It fully restored the long-haul passenger frequencies to Los Angeles, Toronto and New York that were cancelled in 2012.

A fifth daily frequency was added to the London route in June and a four-times-weekly service to Male in the Maldives was introduced in October.

Cathay Pacific launched a daily service to Newark in the United States in March 2014, will launch a daily service to Doha in late March 2014 and will add more flights to Los Angeles and Chicago from the summer 2014.

Dragonair launched flights to Da Nang, Siem Reap, Wenzhou, Yangon and Zhengzhou in 2013 and will begin a two-times-weekly service to Denpasar, Bali in Indonesia in April 2014.

On the product side, premium economy class was available on 85 long-haul and medium-haul Cathay Pacific aircraft by the end of 2013, while the installation of new regional business class seats will be completed by the third quarter of 2014.

Other projects include the introduction of the restyled and upgraded first class cabins on Boeing 777-300ER aircraft and the installation of new business class and economy class seats in Dragonair’s aircraft.

The renovated first class lounge at The Wing reopened in February and the airline opened The Bridge, its fifth departure lounge at Hong Kong International Airport, in October 2013.

Website can be found at www.cathaypacific.com