Cathay Pacific's profit increased to HK$3.2b in 2014

Business impressively picked up in 2H14.

The Cathay Pacific Group reported an attributable profit of HK$3,150 million for 2014, compared to a profit of HK$2,620 million in 2013.

According to a release from Cathay Pacific, earnings per share were HK80.1 cents compared to HK66.6 cents in 2013. Turnover for the year increased by 5.5% to HK$105,991 million.

In the first half of 2014 the Group’s business was affected by high fuel prices, reduced passenger yield and continued weakness and over-capacity in the air cargo market.

Business was better in the second half of the year. For the full year, passenger demand was reasonably firm, with high demand during the peak summer and Christmas periods.

After a prolonged period of weakness, cargo demand started to improve in the summer of 2014 and was strong in the fourth quarter, which is the peak period for cargo. The Group’s business benefited from lower fuel prices in the fourth quarter, but this was partially offset by fuel hedging losses.

Here's more from Cathay Pacific:

Passenger revenue for Cathay Pacific and Dragonair in 2014 increased by 5.4% to HK$75,734 million compared to the previous year.

Capacity increased by 5.9% as a result of the introduction of new routes (to Doha, Manchester and Newark) and increased frequencies on some existing routes.

The load factor increased by 1.1 percentage points to 83.3% and the number of passengers carried increased by 5.5% to 31.6 million. Yield decreased by 1.8% to HK67.3 cents despite an improvement in the second half compared to the first half of the year.
Passenger demand was strong in all classes of travel on long-haul routes. However, the increase in passenger numbers did not match the increase in capacity on North American routes. Strong competition put downward pressure on yield on regional routes.

After a prolonged period of weakness, cargo demand started to improve in the summer of 2014 and was very strong in the fourth quarter. The Group’s cargo revenue in 2014 increased by 7.3% to HK$25,400 million compared to the previous year.

Over-capacity in the air cargo market put downward pressure on rates in the first half of the year. Yield for the full year for Cathay Pacific and Dragonair decreased by 5.6% to HK$2.19, despite improved cargo demand in the second half.

Capacity increased by 10.4%. The load factor increased by 2.5 percentage points to 64.3%. Capacity was managed in line with demand in the first half of 2014 but an almost full freighter schedule was operated for most of the second half.

The new Cathay Pacific cargo terminal worked effectively in its first full year of operation and made the Group’s cargo operations more efficient.