Cathay Pacific 2010 Annual Report Download - page 15

Cathay Pacific Airways Limited Annual Report 2010
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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 reached 32 countries and regions, including 47
international cities, 91 domestic cities and three regions.
The Group has two representatives on the Board of
Directors of Air China and equity accounts for its share
of Air China’s profit.
The Group’s share of Air China’s profit is based on
accounts drawn up three months in arrear and
consequently the 2010 annual results include Air
China’s results for the 12 months ended 30th
September 2010.
In an announcement made on 13th January 2011 about
its expected results for 2010, Air China made the
following statement. “In 2010, benefiting from the
rapid growth of the macro-economy of China and the
steady recovery of the global economy, the Company
was able to seize the market opportunity of a strong
demand for both passenger and cargo transportation
services. The Company achieved a substantial increase
in its operating profit for the year of 2010 through
active production organisation, effective marketing and
further exploration of its cost potential. In addition, we
increased our shareholding in Shenzhen Airlines
Company Limited becoming its controlling shareholder,
the synergy created by which also contributed to the
improvement of the annual results of the Company.”
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2010 in Review
Hong Kong Aircraft Engineering Company
Limited (“HAECO”)
On 7th June 2010, Cathay Pacific announced that it
had agreed to sell its remaining 15% shareholding in
HAECO to Swire Pacific Limited. The transaction was
driven by our strategic priorities and will benefit our
core aviation business. It enabled us to apply the
proceeds from the transaction towards other
investments in Cathay Pacific’s core aviation business,
including new aircraft, in our new cargo terminal and
enhancements in products and services, and towards
Cathay Pacific’s general working capital requirements.
The longstanding operational relationship
between Cathay Pacific and HAECO will remain
unchanged. HAECO has always been our main
provider of overhaul and maintenance services and we
are HAECO’s biggest customer airline.
Cathay Pacific’s share of HAECO’s profits up to the
date of sale in 2010 was HK$44 million, compared with
a share of HAECO’s profits for the whole of 2009 of
HK$188 million.
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