Cathay Pacific have fallen to a 2 billion HKD first half loss amidst fierce competition with other airlines, higher fuel prices and weakened demand across a number of its’ markets.
The airline reported a net loss of HK$2.051 billion (USD$262 million) for the six months to June 30 2017, plummeting from the 2016’s first half period of HK$353 million (USD$45 million).
This performance unveiled on Wednesday will put Cathay Pacific on track to post its first back-to-back loss since the airline was first established in 1946.
The particular rapid expansion of new Chinese airlines on international routes has reduced the number of passengers transiting through Cathay Pacific’s Hong Kong hub.
Cathay Pacific’s chairman John Slosar said that outlook on the remaining half of the year shows little promise.
“We do not expect the operating environment in the second half of 2017 to improve materially”, he said in a statement.”
On a more positive note, Slosar said that the cargo market is set to prosper in the second half with its new transformation plan to roll out in the second half of 2017.
Earlier this year Cathay laid off 600 staff due to the airline facing stiff competition from rival carriers and the airline restructurings it’s management.
In order to rebound from this loss Cathay have said that they are considering new measures in order to cater for more price-sensitive travelers without creating its own budget airline.
John Slosar said that the airline could match the low-cost carrier’s. “It is not the case that just because we are a full-service airline doesn’t mean we can’t compete with so-called low-cost airlines,” he said. “If you look at their pricing, they may be low cost, but they might not be low price.”
The airlines’ director of commercial and cargo Ronald Lam Siu-por, said that the carrier would “further differentiate” economy class against its rivals so that “the value of our customers will improve” and that several initiatives would be considered.
Currently Cathay Pacific has 17 A350-900s in its fleet with a further 5 to be delivered by the end of 2017.