Wednesday, March 9, 2011

Cathay profit triples amid oil fears

Cathay Pacific has reported strong full-year earnings - but at the same time warned about the dangers of rising oil prices. The airline booked a net profit of just over HK$14-billion last year - triple the 2009 result of HK$4.69-billion.
But its chairman, Christopher Pratt, said surging oil prices loom as a big challenge for the airline. "Our results would be adversely affected, and very quickly so, by a return to recessionary economic conditions," he said.

"Demand is at present expected to remain strong in 2011, but this expectation could be undermined if the current (or any higher) level of prices were to reduce global economic activity," he added.

Cathay also announced that it would acquire 27 planes from Airbus and Boeing in a deal worth as much as HK$51-billion. The airline said it had struck a deal with Airbus for 15 A330-300s and a separate agreement with Boeing for ten 777-300s. The airline also said it would lease two Airbus A350-900s. Cathay said all the models would be delivered before the end of 2015.

The airline's share price surged following the results announcement, closing 4.5 percent higher at HK$18-94.

Neha Jain

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