The Cathay Pacific Group announced an attributable profit of HK$3,150 million in 2014, a 20.2% increase compared to 2013. In the first half of 2014 the Group’s business was affected by high fuel prices, reduced passenger yield and continued weakness and over-capacity in the air cargo market. Business was better in the second half of the year.
For the full year, passenger demand was reasonably firm, with high demand during the peak summer and Christmas periods. After a prolonged period of weakness, cargo demand started to improve in the summer of 2014 and was strong in the fourth quarter, which is the peak period for cargo. The Group’s business benefited from lower fuel prices in the fourth quarter, but this was partially offset by fuel hedging losses.
Despite the challenging operating environment, we are committed to further developing Hong Kong as a world leading aviation hub. This is reflected in our investment in network development, fleet upgrades, providing superior service and quality products. As at 31st December 2014, we had 79 new aircraft due for delivery up to 2024.
We took measures to improve our efficiency, by modernising our aircraft fleet accelerating the retirement of the less fuel efficient Boeing 747-400 and Airbus A340-300 aircraft, and improving operational efficiency. On the cargo side, we adjusted capacity in line with demand throughout the year, reducing the size of our freighter fleet and at the same time increasing its efficiency.
Our strategy is to continue to focus on ensuring that our service proposition to the customer remains strong; improving productivity; developing the strategic relationship with Air China; and maintaining a prudent approach to financial risk management.
We will continue to invest to make our business stronger while keeping our financial position strong.
Key investor and business sustainability recognition in 2014:
Principal subsidiaries and associates
Please refer to p.96-97 of our Annual Report for the full list.