Cathay Pacific 2003 Annual Report Download - page 5

Cathay Pacific Airways Limited Annual Report 2003 3
Chairman’s Letter
In 2003 Cathay Pacific’s operations were severely disrupted by the SARS outbreak,
which resulted in a steep decline in passenger demand and several months of heavy
losses. However, demand for both business and leisure travel picked up quickly in the
third quarter and, with the help of continuing strong performance from our cargo
business, we were able to return to profitability and recover much of the ground lost.
For the full year the Group recorded an attributable profit of HK$1,303 million,
compared to a profit of HK$3,983 million in 2002. Turnover at HK$29,578 million
was down 10.6% compared to the previous year.
The recovery of the second half came quicker than
initially expected and was attributable to both pent-up
demand and special offers created to stimulate
passenger traffic. All suspended services were
restored by late September and, furthermore, we
mounted additional flights to London (now three times
daily), Auckland, Johannesburg, Melbourne and Rome.
Overall, passenger revenue fell 16.6% from 2002 and
passenger yield fell 4.6% to HK43.3 cents.
On 2nd December we opened another important
chapter in the airline’s history by resuming services to
Beijing. The airline has also been granted licences by
Hong Kong’s Air Transport Licensing Authority to
operate services to Shanghai and Xiamen and we
intend to mount services to these cities once the
necessary approvals have been obtained from the
relevant authorities.
Demand for cargo services remained strong
throughout the year, in particular to key markets in
Europe, Japan and the United States. In October we
carried a new monthly record of 87,275 tonnes of
freight. Osaka and Singapore were added to the
freighter network together with additional frequencies
to Brussels, Manchester, Milan and cities in the
United States. The Group’s 2003 cargo revenue
increased 5.6% over the previous year. However,
cargo yield fell 1.1% to HK$1.78.
Our other aviation related service businesses were
also affected to varying degrees by the SARS crisis,
but similarly benefited from the subsequent pickup
in demand.
During the year, we increased the fleet by six new
aircraft (one Airbus 340-600, three Airbus 330-300s
and two Boeing 777-300s), bringing total fleet size to
85 aircraft at year end. We are currently studying
options for the further expansion of our fleet to meet
anticipated growth in demand.
Cooperation within the oneworld alliance, now five
years old, was extended with the acceptance of
Swiss International Air Lines as the ninth alliance
member. Our codeshare agreement with American
Airlines was also expanded, adding four more
destinations in the United States.
As Hong Kong’s leading airline, we were pleased to
be able to play a key role in various SARS recovery
initiatives, including the very successful “We Love
Hong Kong” campaign, to rebuild public confidence
and boost tourism into Hong Kong. Our thanks go to
our partners in Hong Kong’s travel industry.
We will continue to invest in our fleet, our product and
our people in order to grow our business and enhance
Hong Kong’s position as a premier global aviation hub.
We shall maintain our own role as a pioneer of aviation
management innovation via further roll-out of our
inflight email product and the launch of a freight
internet service portal.
I would like to express sincere thanks to our staff for
their hard work which has seen the airline come
through an extremely, indeed uniquely, testing year in
remarkably good shape and well positioned to benefit
from the growth opportunities of the coming years.
James Hughes-Hallett
Chairman
10th March 2004