20 MARCH 2017
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The Cathay Pacific Group last week reported a loss of HK$575m (about £60m) for 2016, its first since the world financial crisis began in 1988. The figure compares to a profit of HK$6,000m (£626m) in 2015.
Cathay said the operating environment for the core airline business was “difficult” in 2016, with a number of factors adversely affecting performance, most important of which was “intense and increasing competition with other airlines”.
Rival carriers had increased capacity significantly, there were more direct flights between mainland China and international destinations and competition from low-cost carriers increased, Cathay said.
Along with overcapacity in the market, three economic factors were also important, the carrier added – reduced economic growth in mainland China, a reduction in the number of visitors to Hong Kong and the strength of the Hong Kong dollar.
However, Cathay added new routes during the year and said it would add Tel Aviv, Barcelona and Christchurch this year and would increase frequency on some other destinations.
Chairman John Slosar said: “We expect the operating environment to remain challenging. Strong competition from other airlines and the adverse effect of the strength of the Hong Kong dollar are expected to continue to put pressure on yield.”
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