Cathay Pacific 2014 Annual Report Download - page 14

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Cathay Pacific Airways Limited
12 2014 in Review
Review of other subsidiaries and
associates
The share of profits from other subsidiaries and associates
in 2014 increased by 67.0% to HK$1,304 million from
HK$781 million. This mainly reflected a stronger
performance from our associate, Air China Cargo following
a fleet restructuring, and from our subsidiary, Cathay Pacific
Services Limited, with 2014 being its first full year of
operation. The contribution from our associate, Air China,
was below expectations. Below is a review of the
performance and operations of other subsidiaries
and associates.
AHK Air Hong Kong Limited (“Air Hong Kong”)
• Air Hong Kong is the only all-cargo airline in Hong Kong.
It is 60% owned by Cathay Pacific. It operates express
cargo services for DHL Express.
• Air Hong Kong operates eight owned Airbus A300-600F
freighters, one dry leased Airbus A300-600F freighter
and three Boeing 747-400BCF converted freighters dry
leased from Cathay Pacific. It has one wet leased Airbus
A300-600F freighter, with its lease term ending in 2015.
• In May 2014, Air Hong Kong early terminated the wet
lease on the Airbus A300-600F freighter and dry leased
the aircraft with effect from October 2014.
• During 2014 Air Hong Kong operated six flights per week
services to Bangkok, Ho Chi Minh City, Nagoya, Osaka,
Penang (via Ho Chi Minh City), Seoul, Shanghai,
Singapore, Taipei and Tokyo and five flights per week
services to Beijing and Manila.
• On-time performance was 88.0% within 15 minutes.
• Compared with 2013, capacity increased by 0.3%. The
load factor increased by 0.6 percentage points. Revenue
tonne kilometres increased by 1.1%.
• Air Hong Kong achieved an increase in profit for 2014
compared with 2013.
Asia Miles Limited (“AML”)
• AML, a wholly owned subsidiary, manages Cathay Pacific
Group’s reward programme. It has more than seven
million members.
• There was a 16% increase in redemptions by Asia Miles
members on Cathay Pacific and Dragonair flights
in 2014.
• In 2014 AML achieved an increase in profit compared
with 2013 due to an increase in business volume.
Cathay Pacific Catering Services (H.K.) Limited
(“CPCS”) and overseas kitchens
• CPCS, a wholly owned subsidiary, operates the principal
flight kitchen in Hong Kong.
• CPCS provides flight catering services to 42
international airlines in Hong Kong. It produced 27.2
million meals and handled 69,000 flights in 2014
(representing a daily average of 74,500 meals and 189
flights and an increase of 5.9% and 5.0% respectively
over 2013). CPCS had a 65.0% share of the flight catering
market in Hong Kong in 2014.
• Increased business volume and effective management
of costs resulted in higher turnover and profit in 2014.
• Outside Hong Kong, profits increased in all kitchens.
Cathay Pacific Services Limited (“CPSL”)
• CPSL, a wholly owned subsidiary, operates the Group’s
cargo terminal at Hong Kong International Airport. It
has the capacity to handle 2.6 million tonnes of
cargo annually.
• CPSL provided cargo handling services to six airlines
(Cathay Pacific, Dragonair, Air Hong Kong and three
others) in 2014. A seventh airline became a customer in
January 2015.
• The terminal handled 1.45 million tonnes of cargo
during 2014.
• 2014 was the first year of full operation of CPSL. As a
consequence, its financial results improved significantly
in the year.