Cathay Pacific 1999 Annual Report Download - page 17

Download and view the complete annual report

Please find page 17 of the 1999 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 65

  • 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

Financial Review
21CATHAY PACIFIC AIRWAYS LIMITED ANNUAL REPORT 1999
Operating expenses
Group Cathay Pacific
1999 1998 1999 1998
HK$M HK$M Change HK$M HK$M Change
Staff 7,299 7,786 -6.3% 6,511 7,082 -8.1%
Inflight service and passenger expenses 1,381 1,563 -11.6% 1,381 1,563 -11.6%
Landing, parking and route expenses 4,971 4,913 +1.2% 4,642 4,618 +0.5%
Fuel 3,641 3,612 +0.8% 3,357 3,377 -0.6%
Aircraft maintenance 2,714 2,891 -6.1% 2,533 2,670 -5.1%
Aircraft depreciation and operating leases 2,855 3,334 -14.4% 2,711 3,192 -15.1%
Other depreciation and operating leases 1,020 941 +8.4% 773 813 -4.9%
Commissions 663 717 -7.5% 657 673 -2.4%
Exchange loss 41 88 -53.4% 38 89 -57.3%
Others 1,295 1,422 -8.9% 935 1,128 -17.1%
Operating expenses 25,880 27,267 -5.1% 23,538 25,205 -6.6%
Net finance charges 918 311 +195.2% 855 229 +273.4%
Total operating expenses 26,798 27,578 -2.8% 24,393 25,434 -4.1%
•Staff costs decreased due to lower staff numbers and a
contribution holiday for certain retirement funds.
•Inflight service and passenger expenses reduced as a result of
better cost control.
•Landing, parking and route expenses increased due to higher
costs from the first full year of operation at Hong Kong
International Airport.
•Fuel costs remained largely unchanged with the higher fuel price
being offset by lower consumption, due in part to the increased
use of fuel-efficient aircraft.
•Aircraft maintenance costs reduced as a result of the younger
average fleet age, the phasing out of the B747 “classics” and the
implementation of successful productivity initiatives.
•Aircraft depreciation and operating lease costs decreased because
of the provision made in 1998 for the impairment in value of the
B747 “classics”.
•Cathay Pacific’s cost per ATK before finance charges fell by 6.5%
to HK$2.17.
•Cost per ATK after finance charges decreased by 4.3% to HK$2.24.
•Net finance charges increased as a result of higher average borrowings, lower returns from short-term funds
and adverse movements in exchange and interest rates.
•The interest cover improved to 3.1 times.
0
20
40
60
80
100
Into wing fuel price and consumption
Million American gallon
9998979695
650
680
710
740
770
800
Before hedging After hedging
Uplifted volume
US cents per
American gallon