Hong Kong’s Cathay Pacific banks on cargo to bring in the cash as 2017 losses forecast at US$357 million
Investment in freight business could pay off as global economy gathers strength
A strong cargo business will be one of the few bright spots for Cathay Pacific Airways when it unveils losses estimated at HK$2.8 billion (US$357 million) on Wednesday on the back of its weak passenger operations.
Hong Kong’s biggest airline has carried more freight at higher prices and added more cargo flights in the past year. The expansion came as earnings from air tickets declined as the company slashed prices to keep pace with budget competition.
“We have not seen such a strong air cargo market since 2010, and as the second largest cargo airline in the world, Cathay Pacific is one of the biggest beneficiaries,” said Corrine Png, chief executive of transport research firm Crucial Perspective.
“Cathay’s continued investment in its cargo business in recent years, while most Asian airlines downsized, is paying off.”
The airline has doubled down on its investment in freight as a recovery in global trade boosts business. It began renting two extra Boeing 747-8 planes last summer to bolster its 20-strong cargo fleet. And late last year it took full control of its Air Hong Kong freighter unit which it had previously partnered in with global logistics firm DHL.
