Cathay Pacific Announces 2000 Interim Results

Cathay Pacific Airways made a profit attributable to shareholders of HK$2,183 million during the six months ended 30 June 2000. This compares with a profit of HK$108 million recorded in the first half of 1999. Turnover rose by 23.1% to HK$16,143 million. Passenger numbers also increased by 17% to 5.8 million.

The much-improved performance was largely due to the continued economic recovery of the region, especially in a number of the airline's key North Asian markets. Passenger load factors have been strong, however, passenger yields have only risen marginally and are still well short of the levels seen in the early 1990s.

The Group's cargo services saw turnover of HK$4,598 million, an increase of 28.6% over the same period in 1999. During the first half, cargo revenue accounted for 28.5% of the group's total turnover, up from 27.3% in 1999. There was a strong recovery in exports from Hong Kong, and from other Asian countries.

Cathay Pacific Chairman James Hughes-Hallett said: "We are very encouraged by the improvement in profitability, however, we still need to improve margins further if we are to provide the returns necessary to justify the major expenditures made on new aircraft."

During the first six months, Cathay Pacific took a number of steps to meet anticipated growth in demand, including ordering new aircraft and employing more staff. Orders were signed for six new aircraft, namely four Airbus Industrie A330-300s, one Boeing 777-200, and one Boeing 747-400 freighter. Cathay Pacific now has outstanding orders for 12 aircraft for delivery by September 2001.

In March, Cathay Pacific commenced joint operations with DHL Worldwide Express at Hong Kong International Airport, delivering express cargo overnight between Hong Kong and four Asian destinations. In its new summer schedule, Cathay Pacific also added additional flights to its passenger network and in September will commence operations to Karachi.

The airline remains firmly committed to building on the strength of Hong Kong as Asia's leading aviation centre and is working closely with the Airport Authority to further enhance the services provided at Hong Kong International Airport, especially for transit passengers.

Cathay Pacific is pursuing a number of e-Business initiatives. In June, the airline announced its participation in a new online travel exchange which will offer new access services to passengers and travel agents. The venture plans to start operations in the fourth quarter of this year. Cathay Pacific has also joined with 12 other airlines to launch the industry's largest e-commerce procurement exchange site, to be known as Aeroxchange.

Mr Hughes-Hallett said: "We are determined to be an Asian industry leader in e-Business. The Internet has tremendous potential to improve the efficiency of our business operations and enhance the services we offer our customers."

Cathay Pacific and its passengers continue to derive benefits from the airline's membership in the oneworld alliance. Two new airlines joined the alliance in the first half of the year, Aer Lingus and LanChile, bringing the total number of airlines in oneworld to eight.

The results for the second half are expected to show an improvement over those recorded in the first half of the year. However given the high load factors experienced in the first half, the improvement may be proportionately less than the airline has traditionally achieved.

Mr Hughes-Hallett said: "Cathay Pacific is now in an excellent position to capitalise on Asia's strengthening recovery and we continue to look forward to the future with confidence. I would like to thank the many staff whose efforts over the past two years have helped to put us in such a strong position."

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