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HONG KONG — Hong Kong’s Cathay Pacific Airways has posted its first annual loss in almost a decade, blaming it on tough competition from rival airlines, slowing Chinese economic growth and a stronger currency.
The airline said Wednesday that it lost 575 million Hong Kong dollars (Cdn$99.54 million) in 2016 compared with a HK$6 billion (Cdn$1.04 billion) profit the year before.
The last time Cathay, Hong Kong’s biggest airline, had an unprofitable year was in 2008, when it lost HK$8.6 billion (Cdn$1.49 billion).
Revenue fell 9.4% to HK$92.7 billion (Cdn$16.05 billion).
The company said “intense and increasing competition with other airlines was the most important factor” affecting its financial results.
It also was buffeted by economic factors including China’s slowdown, fewer tourists visiting Hong Kong and a stronger Hong Kong dollar, which is pegged to the U.S. dollar. The airline said a stronger dollar makes the city more costly for visitors and reduces profits earned in other currencies when they are converted back.
“We expect the operating environment in 2017 to remain challenging,” Chairman John Slosar said in a statement.
The airline benefited from lower crude oil prices, which reduced fuel costs, its single biggest expense, by 15%.
Revenue at its cargo business shrank 13.2%, with demand particularly weak on routes to Europe.