Cathay Pacific 2002 Annual Report Download - page 6

Cathay Pacific Airways Limited Annual Report 2002 3
Chairman’s Letter
In 2002 the Group recorded one of its most
profitable years. This was an outstanding
achievement given that the aviation industry was
still suffering from the turmoil of 2001. The Group
reported an attributable profit of HK$3,983 million,
compared to a profit of HK$657 million a
year earlier. Turnover increased 8.7% to
HK$33,090 million.
Our much improved performance came from
increased passenger demand, the continued
growth of our cargo business, and the success of
ongoing efforts to increase productivity and lower
our operating costs.
Passenger traffic recovered faster than we
expected. As market conditions improved we
restored services that had been temporarily
suspended following the September 2001 attacks
and increased the frequency of flights to Auckland,
Brisbane, Colombo, Johannesburg, London,
Melbourne and Tokyo. Load factors achieved
record levels and many flights operated
at full capacity. Passenger yield fell by 0.7% to
HK45.4 cents.
Our cargo operation enjoyed uninterrupted growth
throughout the year and generated 28.4% of the
Group’s turnover. Its growth was driven to a large
extent by the high demand for Hong Kong exports
in Europe, Asia and, in particular, North America.
Cargo services to Europe were strengthened by
the addition of Milan, Manchester and Brussels
to our freighter network. Cargo yield fell by 2.7%
to HK$1.80.
Our affiliates and associates performed well with
profit increasing despite competitive pressure.
In February 2002 the all cargo carrier AHK Air Hong
Kong Limited (“AHK”) became a wholly owned
subsidiary and in October DHL International
Limited (“DHL”) bought a 30% stake in AHK to
form an express cargo operation. AHK has initially
ordered six Airbus 300-600 freighter aircraft to
operate regional DHL services from Hong Kong
International Airport. Its fleet should increase
significantly over the years to come.
In November we became the first airline in Asia
to take delivery of the new long range Airbus
340-600 passenger aircraft. Furthermore, last year
we ordered three Boeing 777-300 and three Airbus
330-300 aircraft which will join our regional
passenger fleet in late 2003 and early 2004. In
conjunction with this fleet expansion programme
we announced plans to hire 1,300 additional staff
in Hong Kong including cabin crew, pilots and
ground staff.
Our code sharing arrangement with oneworld
partner American Airlines has now received
regulatory approval. This agreement will generate
additional traffic through Hong Kong, which is the
key to our future growth and to Hong Kong’s future
as a regional aviation hub. A successful outcome
to our application to operate services to the
Chinese Mainland will also strengthen Hong
Kong’s hub position, even though timing remains
uncertain.
In considering the outlook for the coming year we
are conscious of the fact that it will be hard to
repeat the performance of 2002 in the context of
the current global political and economic
uncertainties. Nevertheless we have every
confidence in our long term future and in our ability
to excel in an increasingly competitive
marketplace.
On behalf of shareholders I would like to thank
our staff for their hard work and achievements
during the year.
James Hughes-Hallett
Chairman
5th March 2003