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Cathay Pacific Airways Limited
Stock Code: 00293
Annual Report 2010

Table of contents

  • Page 1
    Cathay Pacific Airways Limited Stock Code: 00293 Annual Report 2010

  • Page 2
    ... of Cathay Pacific. Dragonair is an Asian regional airline, registered and based in Hong Kong, which offers scheduled passenger and cargo services to 33 destinations in 14 countries and territories with a fleet of 31 aircraft. Cathay Pacific also owns 18.7% of Air China Limited ("Air China"), the...

  • Page 3
    ... 96 98 Cathay Pacific Cathay Pacific Freighter Dragonair Air Hong Kong Financial and Operating Highlights Chairman's Letter 2010 in Review Review of Operations Financial Review Directors and Officers Directors' Report Corporate Governance Independent Auditor's Report Principal Accounting Policies...

  • Page 4
    ... and Operating Highlights Group Financial Statistics 2010 2009 Change Results Turnover Profit attributable to owners of Cathay Pacific Earnings per share Dividend per share Profit margin HK$ million HK$ million HK cents HK cents % 89,524 14,048 357.1 111.0 15.7 66,978 4,694 119.3 10.0 7.0 +33...

  • Page 5
    ...2009. Our total fuel costs for 2010 (disregarding the effect of fuel hedging), reflecting both the higher price and increased operations, increased by 40.4%. Managing the risk associated with fuel price changes is a key challenge. The Group's fuel hedging activities resulted in a reported loss of HK...

  • Page 6
    ..., Canada and Japan. Dragonair added a new service to Hongqiao in Shanghai, restored services to Fukuoka and Sendai in Japan and added Okinawa to its network. In December 2010 Cathay Pacific announced the introduction of a new long-haul flat-bed business class seat. During the year we opened a new...

  • Page 7
    .... The Group remained focused on further developing its home city, Hong Kong, as one of the world's leading international aviation hubs and reinforced its commitment to sustainable development. Award winning products and services • In December, Cathay Pacific launched its new business class seat...

  • Page 8
    ... freighter service in July, flying twice-weekly to Chicago and then on to Amsterdam and Dubai before flying back to Hong Kong. This is the first time Cathay Pacific has operated transatlantic flights. Hub development • As business conditions improved, we restored passenger services and added new...

  • Page 9
    ... booking flights departing from Hong Kong. In late 2010 this service was extended to flights departing from Singapore and Australia. • In June 2010, Cathay Pacific became the first Asian airline to introduce an online ticket change function. The service was launched in the North American market...

  • Page 10
    ... alliance and its member airlines offered support to LAN after its operations were affected by February's major earthquake in Chile. • Several new codeshare arrangements in North America and Japan were announced towards the end of 2010. The Japan Airlines code is now on Cathay Pacific flights...

  • Page 11
    ... to promote our FLY Contribution to the community • In March, Cathay Pacific won the Total Caring Award (part of the Caring Company Scheme organised by the Hong Kong Council of Social Service), which recognised the airline's commitment to caring for the well-being of the community, its employees...

  • Page 12
    ...800 to 1,000 more cabin crew in 2011. • Cathay Pacific launched a marketing campaign in March which focused on members of our staff who create the airline's special brand of service. Advertisements which highlight the professional and personal qualities of customer-facing staff have been backed up...

  • Page 13
    ...recruit another 300 cabin crew in 2011. • Dragonair continues to run its own cadet pilot scheme. 12 new cadets were recruited in 2010. Our complete Sustainable Development Report is available online at www.cathaypacific.com. Fleet profile* Number as at 31st December 2010 Leased Aircraft type Firm...

  • Page 14
    ... The airline operates a fleet of eight owned Airbus A300-600F freighters and three wet-leased aircraft. One of the wet-leased aircraft is a Boeing 747-400BCF freighter leased from Cathay Pacific. • Air Hong Kong operates six flights per week to Bangkok, Seoul, Shanghai, Singapore, Taipei and Tokyo...

  • Page 15
    ... Report 2010 2010 in Review Air China Limited ("Air China") • Air China, in which Cathay Pacific owns 18.7%, is the national flag carrier and leading provider of passenger, cargo and other airline related services in Mainland China. • As at 31st December 2010, the airline's scheduled flights...

  • Page 16
    30 new Airbus A350-900s ordered in August 2010 - our biggest-ever single aircraft purchase. 3 new routes - Moscow, Milan and Haneda - launched in 2010, and Abu Dhabi and Chicago already set to launch in 2011.

  • Page 17
    15 new Airbus A330-300s and 10 new Boeing 777-300ERs ordered in March 2011. A total of 91 new aircraft on firm orders, underscoring our commitment to our home city, Hong Kong. Investing in Our Future The HK$5.5 billion Cathay Pacific Cargo Terminal will open in 2013, underlining the airline's ...

  • Page 18
    Review of Operations PASSENGER SERVICES Cathay Pacific and Dragonair carried a total of 26.8 million passengers in 2010, an increase of 9.1% compared with 2009 and a record high for the Group. Both airlines achieved a strong increase in passenger load factors and yields compared to the previous ...

  • Page 19
    Cathay Pacific Airways Limited Annual Report 2010 Review of Operations PASSENGER SERVICES Home market - Hong Kong and Pearl River Delta • Demand on routes originating in Hong Kong was robust in all classes of travel, reflecting recovery from the financial crisis and the strength of Hong Kong's ...

  • Page 20
    ... Cathay Pacific will restore seven more flights a week to Taipei from late March, bringing the total number of flights to 108 per week. North America • The markets in the United States and Canada recovered strongly. Premium class traffic has been strong on all North America routes, but business...

  • Page 21
    Cathay Pacific Airways Limited Annual Report 2010 Review of Operations CARGO SERVICES ASIA MILES There was a significant increase in the demand for air cargo in 2010, with a strong and sustained recovery in all major markets. The tonnage carried by Cathay Pacific and Dragonair was 1.8 million ...

  • Page 22
    ...Amsterdam and Dubai before flying back Hong Kong. The twice-weekly flight offers significant commercial and operational benefits and has seen good demand. This is the first time Cathay Pacific has operated transatlantic flights. • We strengthened a number of scheduled freighter services during the...

  • Page 23
    ... of flights by Asia Miles members on our 20 partner airlines decreased by 1% in 2010. Almost 90% of Cathay Pacific flights carried passengers redeeming frequent flyer miles. • Asia Miles offers over 800 non-flight redemption products to members. There was a 7% increase on non-flight redemptions...

  • Page 24
    The CX Mobile application offers a wide range of services, including bookings and check in, for people on the move. Our New Products & Services The Cabin, our latest passenger lounge at Hong Kong International Airport, offers a new level of comfort and convenience.

  • Page 25
    ... iPad app - one of the world's first customised airline applications for the device - puts passengers in touch with a wide range of Cathay Pacific online services. Our new long-haul Business Class offers the things our customers want - a combination of privacy and openness, and one of the longest...

  • Page 26
    ... Hong Kong Aircraft Engineering Company Limited and on the deemed disposal of shares in Air China. Turnover Group 2010 HK$M 2009 HK$M Cathay Pacific and Dragonair 2010 HK$M 2009 HK$M Passenger services# Cargo services# Catering, recoveries and other services Turnover # Includes relevant surcharges...

  • Page 27
    ... from Mainland China routed through Hong Kong remained strong. • Fuel surcharges increased by HK$3.6 billion as a result of higher fuel prices and more passengers and cargo carried. • The cargo load factor increased by 4.9 percentage points. The cargo yield increased by 25.3% to HK$2.33. • The...

  • Page 28
    Financial Review Operating expenses Group 2010 HK$M 2009 HK$M Cathay Pacific and Dragonair 2010 HK$M 2009 HK$M Change Change Staff Inflight service and passenger expenses Landing, parking and route expenses Fuel Aircraft maintenance Aircraft depreciation and operating leases Other depreciation, ...

  • Page 29
    ... Pacific Airways Limited Annual Report 2010 Financial Review Cathay Pacific and Dragonair operating results analysis 2010 HK$M 2009 HK$M Airlines' operating profit before fuel hedging, non-recurring items and tax Profit on disposal of Hactl and HAECO shares Gain on deemed disposal of Air China...

  • Page 30
    ... assets were HK$8,110 million, comprising HK$6,742 million for aircraft and related equipment, HK$1,211 million for buildings and HK$157 million for other equipment. The Group's policy is to reduce exposure to fuel price risk by hedging a percentage of its expected fuel consumption. As the Group...

  • Page 31
    Cathay Pacific Airways Limited Annual Report 2010 Financial Review Borrowings and capital • Borrowings decreased by 7.1% to HK$39,629 million from HK$42,642 million in 2009. • Borrowings are mainly denominated in US dollars, Hong Kong dollars, Singapore dollars, Japanese yen and Euros, and are...

  • Page 32

  • Page 33
    On the ground, in the air and behind the scenes, our people always go the extra mile to make you feel special. Our People The popular "Meet the Team" function at our website introduces you to the diverse group of people who make travelling on Cathay Pacific a unique experience.

  • Page 34
    ... in Hong Kong, Mainland China, Taiwan, Thailand and Australia. He was appointed Director Service Delivery in September 2008 and is also Chairman of Cathay Pacific Catering Services (H.K.) Limited. HUGHES-HALLETT, James Edward#, aged 45, has been Finance Director of the Company since March 2009. He...

  • Page 35
    ... Corporation (Hong Kong) Limited and a Director of Shandong Aviation Group Corporation until her retirement from Air China Limited in February 2011. # WONG, Tung Shun Peter*, aged 59, has been a Director of the Company since May 2009. He is currently Chief Executive of The Hongkong and Shanghai...

  • Page 36
    ..., 12th May 2011. Activities Cathay Pacific Airways Limited (the "Company") is managed and controlled in Hong Kong. As well as operating scheduled airline services, the Company and its subsidiaries (the "Group") are engaged in other related areas including airline catering, aircraft handling and...

  • Page 37
    Cathay Pacific Airways Limited Annual Report 2010 Directors' Report Commitments and contingencies The details of capital commitments and contingent liabilities of the Group and the Company as at 31st December 2010 are set out in note 31 to the accounts. Discloseable transaction CPAS entered into ...

  • Page 38
    ... in the Company's core aviation business, including investments in new aircraft, in the new cargo terminal being constructed at the Hong Kong International Airport, in continuing enhancements in products and services, as well as towards Cathay Pacific's general working capital requirements...

  • Page 39
    ... effect from 1st January 2011 and are therefore exempt from the reporting, annual review, announcement and independent shareholders' approval requirements under the Listing Rules. The fees payable by DHL to Air Hong Kong under the DHL Services Agreement totalled HK$2,093 million for the year ended...

  • Page 40
    ... ("Air China Group") on the other hand arising from joint venture arrangements for the operation of passenger air transportation, code sharing arrangements, interline arrangements, aircraft leasing, frequent flyer programmes, the provision of airline catering, ground support and engineering services...

  • Page 41
    Cathay Pacific Airways Limited Annual Report 2010 Directors' Report For the year ended 31st December 2010 and under the Air China Framework Agreement, the amounts payable by the Group to Air China Group totalled HK$403 million; and the amounts payable by Air China Group to the Group totalled HK$...

  • Page 42
    ... from the Company or any of its subsidiaries. Directors' interests At 31st December 2010, the register maintained under Section 352 of the Securities and Futures Ordinance ("SFO") showed that Directors held the following interests in the shares of Cathay Pacific Airways Limited: Percentage of...

  • Page 43
    Cathay Pacific Airways Limited Annual Report 2010 Directors' Report Substantial shareholders The register of interests in shares and short positions maintained under Section 336 of the SFO shows that as at 31st December 2010 the Company had been notified of the following interests in the shares of...

  • Page 44
    .... Day-to-day management of the Company's business is delegated to the CE. Matters reserved for the Board are those affecting the Company's overall strategic policies, finances and shareholders. These include: financial statements, dividend policy, significant changes in accounting policy, the annual...

  • Page 45
    Cathay Pacific Airways Limited Annual Report 2010 Corporate Governance Securities Transactions The Company has adopted codes of conduct regarding securities transactions by Directors (the "Securities Code") and relevant employees (as defined in the CG Code) on terms no less exacting than the ...

  • Page 46
    ...executives of high quality are seconded to and retained within the Company. A number of Directors and senior staff with specialist skills are employed directly by the Company on similar terms. This policy and the levels of remuneration paid to executive Directors of the Company were reviewed by the...

  • Page 47
    .... In addition to its agreed annual schedule of work, the Department conducts other special reviews as required. The Internal Audit Manager has direct access to the Audit Committee. Audit reports are sent to the Chief Operating Officer, the Finance Director, external auditors and the relevant...

  • Page 48
    ... the annual general meeting to discuss matters relating to the Company. Any inquiries from shareholders can be addressed to the Corporate Communication Department whose contact details are given on page 104. In order to promote effective communication, the Company maintains its website at Airline...

  • Page 49
    ...Annual Report 2010 Independent Auditor's Report To the shareholders of Cathay Pacific Airways Limited (Incorporated in Hong Kong with limited liability) We have audited the consolidated financial statements of Cathay Pacific Airways Limited ("the Company") and its subsidiaries (together "the Group...

  • Page 50
    ...Companies Ordinance and the applicable disclosure provisions of the Rules Governing the Listing of Securities (the "Listing Rules") of The Stock Exchange of Hong Kong Limited (the "Stock Exchange"). The measurement basis used is historical cost modified by the use of fair value for certain financial...

  • Page 51
    Cathay Pacific Airways Limited Annual Report 2010 Principal Accounting Policies (a) unrealised exchange differences on foreign currency denominated financial assets and liabilities, as described in accounting policies 8, 9 and 10 below, that qualify as effective cash flow hedge instruments under ...

  • Page 52
    ... position. Where derivative financial instruments are designated as effective hedging instruments under HKAS 39 "Financial Instruments: Recognition and Measurement" and hedge exposure to fluctuations in foreign exchange rates, interest rates or jet fuel prices, any fair value change is accounted...

  • Page 53
    ...17. Frequent-flyer programme The Company operates a frequent-flyer programme called Asia Miles (the "programme"). As members accumulate miles by travelling on Cathay Pacific or Dragonair flights, part of the revenue from the initial sales transaction equal to the programme awards at their fair value...

  • Page 54
    ... HK$M 2009 HK$M 2010 US$M 2009 US$M Note Turnover Passenger services Cargo services Catering, recoveries and other services Total turnover Expenses Staff Inflight service and passenger expenses Landing, parking and route expenses Fuel Aircraft maintenance Aircraft depreciation and operating leases...

  • Page 55
    Cathay Pacific Airways Limited Annual Report 2010 Consolidated Statement of Financial Position at 31st December 2010 2010 HK$M 2009 HK$M 2010 US$M 2009 US$M Note ASSETS AND LIABILITIES Non-current assets and liabilities Fixed assets Intangible assets Investments in associates Other long-term ...

  • Page 56
    ... in HK$, the functional currency. The US$ figures are shown only as supplementary information and are translated at HK$7 .8. The notes on pages 58 to 97 and the principal accounting policies on pages 48 to 51 form part of these accounts. Christopher Pratt Director Hong Kong, 9th March 2011 54...

  • Page 57
    Cathay Pacific Airways Limited Annual Report 2010 Consolidated Statement of Cash Flows for the year ended 31st December 2010 2010 HK$M 2009 HK$M 2010 US$M 2009 US$M Note Operating activities Cash generated from operations Dividends received from associates Interest received Net interest paid Tax ...

  • Page 58
    ... Changes in Equity for the year ended 31st December 2010 Noncontrolling interests Attributable to owners of Cathay Pacific Non-distributable Investment Share revaluation premium reserve HK$M HK$M Capital Cash flow redemption hedge reserve and reserve others HK$M HK$M Total equity Share capital HK...

  • Page 59
    ... Airways Limited Annual Report 2010 Company Statement of Changes in Equity for the year ended 31st December 2010 Attributable to owners of Cathay Pacific Non-distributable Investment revaluation reserve HK$M Capital Cash flow redemption hedge reserve and reserve others HK$M HK$M Share capital HK...

  • Page 60
    ... and surcharges from transportation services, airline catering, recoveries and other services provided to third parties. 2. Segment information (a) Segment results Airline business 2010 HK$M 2009 HK$M Non-airline business 2010 HK$M 2009 HK$M Unallocated 2010 HK$M 2009 HK$M Total 2010 HK$M 2009 HK...

  • Page 61
    Cathay Pacific Airways Limited Annual Report 2010 Notes to the Accounts STATEMENT OF COMPREHENSIVE INCOME 2. Segment information (continued) (b) Geographical information 2010 HK$M 2009 HK$M Turnover by origin of sale: North Asia - Hong Kong and Mainland China - Japan, Korea and Taiwan India, ...

  • Page 62
    ... COMPREHENSIVE INCOME 5. Operating profit 2010 HK$M 2009 HK$M Operating profit has been arrived at after charging/(crediting): Depreciation of fixed assets - leased - owned Amortisation of intangible assets Operating lease rentals - land and buildings - aircraft and related equipment - others Net...

  • Page 63
    Cathay Pacific Airways Limited Annual Report 2010 Notes to the Accounts STATEMENT OF COMPREHENSIVE INCOME 7. Taxation 2010 HK$M 2009 HK$M Current tax expenses - Hong Kong profits tax - overseas tax - under/(over) provisions for prior years Deferred tax - origination and reversal of temporary ...

  • Page 64
    ... of Cathay Pacific, a profit of HK$12,875 million (2009: HK$7,667 million) has been dealt with in the accounts of the Company. 10. Earnings per share (basic and diluted) Earnings per share is calculated by dividing the profit attributable to owners of Cathay Pacific of HK$14,048 million (2009: HK...

  • Page 65
    Cathay Pacific Airways Limited Annual Report 2010 Notes to the Accounts 12. Fixed assets STATEMENT OF FINANCIAL POSITION Aircraft and related equipment Owned HK$M Leased HK$M Other equipment Owned HK$M Leased HK$M Buildings Under Owned construction HK$M HK$M Total HK$M Group Cost At 1st ...

  • Page 66
    ... to the Accounts STATEMENT OF FINANCIAL POSITION 12. Fixed assets (continued) Aircraft and related equipment Owned HK$M Leased HK$M Other equipment Owned HK$M Leased HK$M Buildings Owned HK$M Total HK$M Company Cost At 1st January 2010 Additions Disposals Transfers At 31st December 2010 At 1st...

  • Page 67
    Cathay Pacific Airways Limited Annual Report 2010 Notes to the Accounts STATEMENT OF FINANCIAL POSITION 12. Fixed assets (continued) (b) Operating leased assets Certain aircraft, buildings and other equipment are under operating leases. Under the operating lease arrangements for aircraft, the ...

  • Page 68
    Notes to the Accounts STATEMENT OF FINANCIAL POSITION 13. Intangible assets Group Goodwill HK$M Computer systems HK$M Total HK$M Company Computer systems HK$M Cost At 1st January 2010 Additions At 31st December 2010 At 1st January 2009 Additions At 31st December 2009 Accumulated amortisation At ...

  • Page 69
    Cathay Pacific Airways Limited Annual Report 2010 Notes to the Accounts STATEMENT OF FINANCIAL POSITION 14. Subsidiaries Company 2010 HK$M 2009 HK$M Unlisted shares at cost Other investments at cost Net amounts due from subsidiaries - loan accounts - current accounts 246 14,983 6,280 10,008 31,...

  • Page 70
    ...-term receivables and investments Group 2010 HK$M 2009 HK$M Company 2010 HK$M 2009 HK$M Investments at fair value - listed in Hong Kong - unlisted Leasehold land rental prepayments Loans and other receivables Derivative financial assets - long-term portion Retirement benefit assets (note 19) 183...

  • Page 71
    Cathay Pacific Airways Limited Annual Report 2010 Notes to the Accounts STATEMENT OF FINANCIAL POSITION 17. Long-term liabilities (continued) (a) Long-term loans Group 2010 HK$M 2009 HK$M Company 2010 HK$M 2009 HK$M Bank loans - secured - unsecured Other loans - secured - unsecured Amount due ...

  • Page 72
    ...Group has commitments under finance lease agreements in respect of aircraft and related equipment expiring during the years 2011 to 2023. The reconciliation of future lease payments and their carrying value under these finance leases is as follows: Group 2010 HK$M 2009 HK$M Company 2010 HK$M 2009 HK...

  • Page 73
    Cathay Pacific Airways Limited Annual Report 2010 Notes to the Accounts STATEMENT OF FINANCIAL POSITION 19. Retirement benefits The Group operates various defined benefit and defined contribution retirement schemes for its employees in Hong Kong and in certain overseas locations. The assets of ...

  • Page 74
    Notes to the Accounts STATEMENT OF FINANCIAL POSITION 19. Retirement benefits (continued) Group 2010 HK$M 2009 HK$M Company 2010 HK$M 2009 HK$M Net (asset)/liability recognised in the statement of financial position: Present value of funded obligations Fair value of plan assets Net unrecognised ...

  • Page 75
    Cathay Pacific Airways Limited Annual Report 2010 Notes to the Accounts STATEMENT OF FINANCIAL POSITION 19. Retirement benefits (continued) Group 2010 HK$M 2009 HK$M Company 2010 HK$M 2009 HK$M Fair value of plan assets comprises: Equities Debt instruments Deposits and cash Others 5,318 1,919 ...

  • Page 76
    ... contribution retirement schemes charged to the Group profit and loss are HK$756 million (2009: HK$677 million). 20. Deferred taxation Group 2010 HK$M 2009 HK$M Company 2010 HK$M 2009 HK$M Deferred tax assets: - provisions - tax losses - cash flow hedges - customer loyalty programmes Deferred...

  • Page 77
    Cathay Pacific Airways Limited Annual Report 2010 Notes to the Accounts STATEMENT OF FINANCIAL POSITION 20. Deferred taxation (continued) Group 2010 HK$M 2009 HK$M Company 2010 HK$M 2009 HK$M Movements in deferred taxation comprise: At 1st January Movements for the year - transferred from the ...

  • Page 78
    ... OF FINANCIAL POSITION 21. Trade, other receivables and other assets (continued) As at 31st December 2010, total derivative financial assets of the Group and the Company which did not qualify for hedge accounting amounted to HK$842 million (2009: HK$1,123 million) and HK$842 million (2009: HK$1,123...

  • Page 79
    Cathay Pacific Airways Limited Annual Report 2010 Notes to the Accounts STATEMENT OF FINANCIAL POSITION 23. Trade and other payables Group 2010 HK$M 2009 HK$M Company 2010 HK$M 2009 HK$M Trade creditors Derivative financial liabilities Other payables Due to associates Due to other related ...

  • Page 80
    Notes to the Accounts STATEMENT OF FINANCIAL POSITION 25. Reserves Group 2010 HK$M 2009 HK$M Company 2010 HK$M 2009 HK$M Retained profit Share premium Investment revaluation reserve Cash flow hedge reserve Capital redemption reserve and others 37,061 16,295 1,102 (1,871) 900 53,487 24,704 16,...

  • Page 81
    Cathay Pacific Airways Limited Annual Report 2010 Notes to the Accounts STATEMENT OF CASH FLOWS 26. Reconciliation of operating profit to cash generated from operations 2010 HK$M 2009 HK$M Operating profit Depreciation Amortisation of intangible assets Loss on disposal of fixed assets and ...

  • Page 82
    ... to the Listing Rules is as follows: Cash Basic salary/ Directors' fee* HK$'000 Non-cash Bonus Contributions paid into to retirement retirement schemes schemes HK$'000 HK$'000 Bonus HK$'000 Allowances & benefits HK$'000 Housing benefits HK$'000 2010 Total HK$'000 2009 Total HK$'000 Executive...

  • Page 83
    Cathay Pacific Airways Limited Annual Report 2010 Notes to the Accounts DIRECTORS AND EMPLOYEES 28. Directors' and executive officers' remuneration (continued) Cash Basic salary/ Directors' fee* HK$'000 Non-cash Bonus Contributions paid into to retirement retirement schemes schemes HK$'000 HK$'...

  • Page 84
    ...of individuals, including those who have retired or resigned during the year, in each employment category whose total remuneration for the year fell into the following ranges: 2010 HK$'000 Director Flight staff Other staff Director 2009 Flight staff Other staff 0 - 1,000 1,001 - 1,500 1,501 - 2,000...

  • Page 85
    ... and Air China group on the other hand arising from joint venture arrangements for the operation of passenger air transportation, code sharing arrangements, interline arrangements, aircraft leasing, frequent flyer programmes, the provision of airline catering, ground support and engineering services...

  • Page 86
    ... ("KFTC") announced it will fine several airlines, including Cathay Pacific, for their air cargo pricing practices. On 29th November 2010, KFTC issued a written decision and Cathay Pacific's fine was KRW 5.35 billion which is approximately HK$36 million at the exchange rate current as of the date of...

  • Page 87
    ... business, the Group is exposed to fluctuations in foreign exchange rates, interest rates and jet fuel prices. These exposures are managed, sometimes with the use of derivative financial instruments, by the Treasury Department of Cathay Pacific in accordance with the policies approved by the Finance...

  • Page 88
    ...029) (67,168) 2009 After one year but within two years HK$M After two years but within five years HK$M Within one year HK$M After five years HK$M Total HK$M Group Bank and other loans Obligations under finance leases Trade and other payables Derivative financial liabilities Total (4,365) (5,225...

  • Page 89
    Cathay Pacific Airways Limited Annual Report 2010 Notes to the Accounts SUPPLEMENTARY INFORMATION 32. Financial risk management (continued) 2010 After one year but within two years HK$M After two years but within five years HK$M Within one year HK$M After five years HK$M Total HK$M Company ...

  • Page 90
    Notes to the Accounts SUPPLEMENTARY INFORMATION 32. Financial risk management (continued) (c) Market risk (i) Foreign currency risk The Group's revenue streams are denominated in a number of foreign currencies resulting in exposure to foreign exchange rate fluctuations. In this respect, it is ...

  • Page 91
    Cathay Pacific Airways Limited Annual Report 2010 Notes to the Accounts SUPPLEMENTARY INFORMATION 32. Financial risk management (continued) 2010 USD HK$M EUR HK$M TWD HK$M AUD HK$M RMB HK$M JPY HK$M Company Trade and other receivables Liquid funds Long-term loans Obligations under finance leases...

  • Page 92
    ... instruments. At the reporting date the interest rate profile of the interest-bearing financial instruments was as below: Group 2010 HK$M 2009 HK$M Company 2010 HK$M 2009 HK$M Fixed rate instruments Liquid funds Long-term loans Obligations under finance leases Interest rate and currency swaps Net...

  • Page 93
    Cathay Pacific Airways Limited Annual Report 2010 Notes to the Accounts SUPPLEMENTARY INFORMATION 32. Financial risk management (continued) Group 2010 HK$M 2009 HK$M Company 2010 HK$M 2009 HK$M Variable rate instruments Liquid funds Long-term loans Obligations under finance leases Interest rate ...

  • Page 94
    ... in the statement of financial position: Carrying amount 2010 HK$M Carrying amount 2009 HK$M (2,595) 110 (1,211) (176) 1,301 (45) (4,680) 164 46 10 92 (45) Fair value 2010 HK$M Fair value 2009 HK$M Group Long-term loans Obligations under finance leases Pledged security deposits (16,986) (28...

  • Page 95
    Cathay Pacific Airways Limited Annual Report 2010 Notes to the Accounts SUPPLEMENTARY INFORMATION 32. Financial risk management (continued) (f) Financial instruments carried at fair value The following table presents the carrying value of financial instruments measured at fair value as at 31st ...

  • Page 96
    ...to the Accounts SUPPLEMENTARY INFORMATION 32. Financial risk management (continued) Group 2009 Level 1 HK$M 2009 Level 2 HK$M 2009 Level 3 HK$M 2009 Total HK$M 2009 Level 1 HK$M Company 2009 Level 2 HK$M 2009 Level 3 HK$M 2009 Total HK$M Assets Investments at fair value - listed - unlisted Liquid...

  • Page 97
    ... requires that financial assets are measured at either amortised cost or fair value. The Group is in the process of assessing the impact of this new accounting standard on both the results and the financial position of the Group. 35. Event after the reporting period In March 2011, agreements were...

  • Page 98
    ... Travel reward programme Cargo terminal Computer network for interchange of air cargo related information Information processing 100 100 100 100 100 100 100 100 100 100 95 Airline Training Property Limited Hong Kong Cathay Pacific Catering Services Hong Kong (H.K.) Limited Cathay Pacific Loyalty...

  • Page 99
    ... of China Ground handling Airline catering Airline catering Airport ground engineering support and equipment maintenance Airline catering Airline catering Philippines Canada Hong Kong 18# 32 40* 30* 50* Cathay Kansai Terminal Services Company Limited Japan Cebu Pacific Catering Services Inc...

  • Page 100
    ...) Other long-term payables Deferred taxation Net assets Financed by: Funds attributable to owners of Cathay Pacific Non-controlling interests Total equity Per share Shareholders' funds EBITDA Earnings/(loss) Dividend Ratios Profit/(loss) margin Return on capital employed Dividend cover Cash interest...

  • Page 101
    Cathay Pacific Airways Limited Annual Report 2010 Statistics 2008 2007 2006 2005 2004 2003 2002 2001 57,964 24,623 3,976 86,563 (94,124) (7,561) - - (468) (1,012) (764) (9,805) 1,333 (8,472) (...

  • Page 102
    ...mail load factor Excess baggage carried Kilometres flown Block hours Aircraft departures Length of scheduled routes network Destinations at year end Staff number at year end ATK per staff On-time performance* Departure (within 15 minutes) Average aircraft utilisation* A320-200 A321-200 A330-300 A340...

  • Page 103
    Cathay Pacific Airways Limited Annual Report 2010 Statistics 2008 2007 2006 2005 2004 2003 2002 2001 24,410 17,499 115,478 24,959 90,975 75.1 78.8 1,645 8,842 65.9 2,963 ...

  • Page 104
    ... 2008 2009 2010 8 4 0 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Productivity* Cost per ATK ATK per HK$'000 staff cost Aircraft utilisation Share prices High Low Year-end Price ratios (Note) Price/earnings Market capitalisation/ funds attributable to owners of Cathay Pacific Price...

  • Page 105
    ... 15 minutes of scheduled departure time. EBITDA Earnings before interest, tax, depreciation and amortisation. Recoveries Cost recoveries from incidental activities. Ratios Earnings/(loss) per share Profit/(loss) attributable to owners of Cathay Pacific Weighted average number of shares (by days) in...

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    ...Limited, please contact: Corporate Communication Department Cathay Pacific Airways Limited 7th Floor, North Tower Cathay Pacific City Hong Kong International Airport Hong Kong Tel: (852) 2747 5210 Fax: (852) 2810 6563 Cathay Pacific's main Internet address is www.cathaypacific.com Registered office...

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    www.cathaypacific.com