Cathay Pacific 2005 Annual Report Download - page 5

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Cathay Pacific Airways Limited Annual Report 2005
Chairman’s Letter
Continuing high fuel prices were the principal cause
behind this disappointing result, with the escalating
cost of fuel producing a reduced profit in the second
half of the year, which is traditionally the much stronger
period. For the full year, fuel expenditure increased by
67.2% to HK$15,588 million, with fuel surcharges on
tickets only partially offsetting the additional cost.
Our unit cost excluding fuel fell 1.9% as we
continued to increase productivity and reduce
controllable overheads.
Passenger revenue increased 14.6% to a record of
HK$30,274 million. We carried 15.4 million passengers
in 2005, up by 1.8 million on the previous year. Yield
increased 1.1% to HK¢46.3, with strong demand from
first and business class passengers. With the addition
of new aircraft and services, our passenger capacity
increased by 11.8%.
During the year, Cathay Pacific launched a third daily
service to Los Angeles, a fourth daily service to
London, and increased frequencies to Amsterdam,
Beijing, Ho Chi Minh City, Johannesburg, Nagoya,
Perth, Seoul and Singapore. We also commenced a
three-times-weekly service to Xiamen and a codeshare
service with Air China to Beijing.
The airline carried a record 1,118,047 tonnes of
freight, mainly as a result of additional capacity and
transshipment cargo to and from Shanghai, and set a
cargo revenue record of HK$11,585 million. However,
both yield and load factor decreased to HK$1.75 and
67.0% respectively due to increased competition and a
slowdown in the growth of exports from South China.
In December, we announced our biggest ever order
for new aircraft, with commitments for 16 Boeing
777-300ER long-range aircraft and three Airbus
330-300s, which will be delivered between 2007 and
2010, together with purchase rights for a further 20
B777-300ERs. This reflects the confidence we have in
the future of Hong Kong and the aviation industry.
We took delivery of the world’s first B747-400BCF,
or Boeing Converted Freighter. The prototype aircraft
was converted by associate, Taikoo (Xiamen) Aircraft
Engineering Company Limited, in Xiamen. We are to
convert five more aircraft and have options on a
further six.
During 2005, we also took delivery of one new
B747-400 freighter, one B777-300 and three
A330-300s while three second-hand B747-400
passenger aircraft were refitted and introduced into
service. Our fleet will total 101 aircraft when we
celebrate Cathay Pacific’s 60th Anniversary in
September 2006.
Our commitment to setting the industry standard for
service has led to several major awards, including
“Airline of the Year”, in global polls of both passengers
and travel industry professionals. These awards are a
tribute to the hard work and dedication of all our staff.
Looking forward, we remain optimistic about our
future, although our 2006 results are likely to remain
heavily dependent on fuel prices and related
surcharges. Our efforts will stay focused on delivering
superior service and value to our customers,
profitably growing our operations, and strengthening
Hong Kong’s position as a global aviation hub.
Christopher Pratt
Chairman
8th March 2006
The Cathay Pacific Group has recorded a profit attributable to shareholders of
HK$3,298 million for 2005, compared with a profit of HK$4,417 million in
2004, although turnover increased by 19.1% to a record HK$50,909 million.