Cathay Pacific 2010 Annual Report Download - page 14

Download and view the complete annual report

Please find page 14 of the 2010 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 108

  • 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
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108

12
Review of other subsidiaries and
associates
The results recorded by our other subsidiaries and our
associates were overall satisfactory. The share of
profits from associates increased by HK$2,326 million
to HK$2,587 million mainly as a result of Air China’s
strong results. Below is a review of their performance
and operations.
AHK Air Hong Kong Limited (“Air Hong
Kong”)
Air Hong Kong is the only all-cargo airline in Hong Kong
and is 60% owned by Cathay Pacific. Its core business
is to operate express cargo services for DHL Express.
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
and five flights per week to Beijing, Manila, Nagoya,
Osaka and Penang (via Bangkok).
On-time performance was 94%, which was slightly
below the target of 95%.
Compared with 2009, capacity increased by 7%. The
load factor and yield improved by 3 percentage points
and 2% respectively.
Air Hong Kong achieved a moderate increase in profit
for 2010 compared with 2009.
•
•
•
•
•
•
Cathay Pacific Catering Services (H.K.) Limited
(“CPCS”) and overseas kitchens
CPCS, a wholly owned subsidiary, is the principal flight
kitchen in Hong Kong.
CPCS produced 22.9 million meals in 2010 and this
accounts for 65% of the airline catering market in
Hong Kong. Business volume increased by 10% from
2009, reflecting the recovery in aviation traffic.
The increase in the volume of sales, coupled with
effective control of operating costs, resulted in an
improved profit margin.
Business volume and profits at the flight kitchens in
Asia (outside Hong Kong) improved over 2009.
However, the Canadian operations showed a deficit in
2010. Operating costs, particularly of labour, were high
and margins contracted.
Hong Kong Airport Services Limited (“HAS”)
HAS, a wholly owned subsidiary, is an integrated
ground handling operator offering both ramp and
passenger handling services in Hong Kong. It provides
ground services to 37 airlines, including Cathay Pacific
and Dragonair.
HAS had 49.5% and 24.4% market shares in ramp and
passenger handling businesses respectively at Hong
Kong International Airport.
In a highly competitive market, the number of
customers for passenger handling dropped to 13 from
17 in 2010. Some new customers were gained despite
the overall loss of customers.
Operating costs were affected by a tight labour market
and increased rates of sickness among staff. It was not
possible to pass on increased costs to customers. The
2010 results of HAS were disappointing.
•
•
•
•
•
•
•
•
2010 in Review