Cathay Pacific 1998 Annual Report Download - page 19

Download and view the complete annual report

Please find page 19 of the 1998 Cathay Pacific annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 70

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70

17
CATHAY PACIFIC AIRWAYS LIMITED ANNUAL REPORT 1998
Review of Operations
•Despite the impact of the Asian economic turmoil, the performance of Dragonair remains
satisfactory as the China market, the backbone of the company’s operation, has been affected to a
smaller extent than other markets in the region. Dragonair has also been very successful in
reducing its operating costs.
•As a result of the disruption at the new Hong Kong International Airport in both July and August
1998, the company experienced loss in revenue, in particular cargo revenue.
•The company carried 2.1 million passengers and uplifted 43,600 tonnes of cargo in 1998, a
decrease of 2.9% and an increase of 11.0% respectively over 1997.
•Passenger yield reduced by 8.0% from 1997 level and cargo yield maintained at 1997 level.
•The company took delivery of one A320 and one A330 in June and October 1998 respectively.
•Fleet profile as at 31st December 1998 is as follows:
In service at Firm orders
Aircraft type 31st December 1998 2000
A320 7 1
A330 6 –
Fleet total 13#1
# All are on operating leases, except for one A320 and two A330s which are under finance leases.
•The company has replaced four A320s with new A320 aircraft powered by International Aero A5
engines in 1998. One A320 was returned to lessor in November 1998 and the replacement aircraft
was delivered in January 1999. Two remaining A320s under operating lease will be replaced with
the new A321s in 1999.
•Dragonair is constructing its own headquarters building at the new Hong Kong International
Airport which is expected to be completed by the end of 1999. The simulator and the flight
training school is expected to be operational in 2000.
•Demand for air services between Hong Kong and Mainland China is expected to increase in line
with the development of China’s economy.
•Dragonair will resume the Kathmandu service in 1999 which will be tagged on the existing Dhaka
operation to form a triangular pattern, twice a week, using A330 aircraft.
•1998 was a difficult year but the management remains optimistic about the future of the airline.
Hong Kong Aircraft Engineering Company Limited (“HAECO”)
•HAECO, in which Cathay Pacific holds a 25% interest, provides aircraft maintenance and overhaul
services at the new Hong Kong International Airport.
•Profit after tax for the year was HK$146 million, lower than that of the previous year.
•Line maintenance revenues were down, as a result of both the reduction in air traffic through
Hong Kong and the increase in competition at the new Hong Kong International Airport.
•Airframe maintenance facilities were well utilised during 1998. Global rates for airframe
maintenance have been stable throughout the year.
•Hong Kong Aero Engine Services Limited (HAESL), HAECO’s 50:50 joint venture with Rolls-Royce
plc, had a satisfactory year and is now fully operational in its new premises at Tseung Kwan O.
•Taikoo (Xiamen) Aircraft Engineering Company Limited (TAECO), 42% owned by HAECO and 9%
by Cathay Pacific, had a successful year. It will shortly complete the construction of a second
hangar.