Cathay Pacific profit nearly doubles as fuel cost falls

Cathay Pacific profit nearly doubles as fuel cost falls

HONG KONG — Cathay Pacific Airways said Wednesday that its annual profit nearly doubled in 2015 as passenger demand grew and tumbling oil prices cut its fuel bill.

Hong Kong’s biggest airline said that net income jumped 90.5 per cent from the year before to 6 billion Hong Kong dollars ($773 million).

Cathay and other airlines are among the biggest beneficiaries of the drop in the price of crude oil, which has fallen from more than $100 a barrel in mid-2014 to the $30 level in recent months.

The airline said the amount it spent on jet fuel, which is its single biggest expense, fell 18 per cent to HK$33 billion ($4.2 billion) last year. That’s even after taking into account bigger losses from taking out contracts aimed at minimizing fuel-bill volatility that locked the carrier into higher prices. The losses from such fuel cost hedging ballooned last year to HK$8.5 billion ($1.1 billion) from HK$911 million in 2014.

The company, which also operates Asian regional carrier Dragonair, said passenger numbers grew 7.9 per cent but revenue slipped 3.4 per cent to HK$102.3 billion ($13.2 billion).

Chairman John Slosar said operating conditions improved last year but he expected some challenges to persist into 2016.

“Strong competition from other airlines in the region, foreign currency movements and weak premium class passenger demand will put pressure on passenger yield,” Slosar said in a statement.

Cathay said that the first of 12 A350 jets ordered from Airbus will be delivered in May. The European planemaker’s latest and most advanced airliner is aimed at competing with Boeing’s 787 Dreamliner, which has proved popular with airlines because of its fuel efficiency.

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