Cathay Pacific 2015 Annual Report Download - page 16

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Cathay Pacific Airways Limited
14
Hong Kong Airport Services Limited (“HAS”)
• HAS,awhollyownedsubsidiary,providesrampand
passenger handling services in Hong Kong. It provides
ground services to 22 airlines, including Cathay Pacific
and Dragonair.
• In 2015, HAS had 47% and 20% market shares in ramp
and passenger handling businesses respectively at
Hong Kong International Airport.
• In 2015, the number of customers for passenger
handling was 20 and the number of customers for ramp
handling was also 20. Both passenger and ramp handling
flights decreased by 1.4% compared with 2014.
• The financial results for 2015 improved, reflecting
higher efficiency, low fuel prices and effective yield
management.
Air China Limited (“Air China”)
• Air China, in which Cathay Pacific has a 20.13% interest
at 31st December 2015, is the national flag carrier and
leading provider of passenger, cargo and other airline-
related services in Mainland China. In July 2015, Air China
proposed the issue of A shares. When the issue
happens, Cathay Pacific’s shareholding in Air China will
be diluted.
• At 31st December 2015, Air China operated 245
domestic and 115 international (including regional)
routes to 40 countries and regions, including 64
overseas cities, four regional cities and 106 domestic
cities.
• We have two representatives on the Board of Directors
of Air China and equity account for our share of Air
China’s profit.
• In June 2015, Air China announced its subsidiary,
Shenzhen Airlines, ordered 46 Boeing 737 aircraft. The
aircraft are expected to be delivered from 2016 to 2020.
• Our share of Air China’s results is based on its financial
statements drawn up three months in arrear.
Consequently, our 2015 results include Air China’s
results for the 12 months ended 30th September 2015,
adjusted for any significant events or transactions for the
period from 1st October 2015 to 31st December 2015.
• For the 12 months ended 30th September 2015, Air
China’s results improved, principally as a result of low fuel
prices and strong passenger demand. In August 2015,
devaluation of the Renminbi led to significant foreign
exchange losses for Air China. However, the foreign
exchange losses were more than offset by savings from
low fuel prices. Overall Cathay Pacific recorded an
increase in profit from Air China in 2015.
Air China Cargo Co., Ltd. (“Air China Cargo”)
• Air China Cargo, in which Cathay Pacific owns an equity
and an economic interest, is the leading provider of air
cargo services in Mainland China. Its headquarters are in
Beijing. Its main operating base is in Shanghai.
• At 31st December 2015, Air China Cargo operated 15
freighters. It flies to 10 cities in Mainland China and 11
cities outside Mainland China. Taking account of its
rights to carry cargo in the bellies of Air China’s
passenger aircraft, Air China Cargo has connections to
174 destinations.
• Air China Cargo’s 2015 financial results were in line with
those of 2014. The adverse effects of exchange losses
on retranslation of United States dollar loans and lower
yield in the highly competitive air cargo market were
offset by the savings from low fuel prices.
2015 in Review