Cathay Pacific Airways said geopolitical and trade tensions are likely to damage the business after the airline rebounded to a profit in the first half.
Protests in Hong Kong cut inbound passenger traffic in July and are “adversely” affecting bookings, Cathay said in a statement Wednesday. First-half net income was $172 million (HK$1.35 billion) compared with a year-ago loss of $33.6 million (HK$263 million).
- With some companies advising staff to put off travel to Hong Kong, Cathay’s second-half performance could come under further pressure. Cathay canceled more than 150 flights as a general strike shut down the city on Monday. Australia on August 6 warned travelers to Hong Kong to “exercise a high degree of caution.”
- Impact from the U.S.-China trade war could hit Cathay more in the second half as the peak season for air freight falls in the fourth quarter. Cathay is Asia’s biggest cargo airline and the business accounts for about a quarter of its revenue.
- “Geopolitical and trade tensions are expected to continue to affect the global economy and, in turn, demand for air travel and air freight,” Cathay chairman John Slosar said in the statement.
- Passenger yields — a gauge of money earned from flying one customer one kilometer — fell 0.9 percent and cargo yields slipped 2.6 percent.
- Cathay is on the last leg of a three-year transformation program to reduce costs and improve Hong Kong’s status as a transit hub in the face of rivals in China.
©2019 Bloomberg L.P.