The Hong Kong-based airline Cathay Pacific Group announced here Wednesday a record attributable loss of about 8.56 billion HK dollars (1.1 billion U.S. dollars) in 2008, compared with a profit of 7.02 billion HK dollars (906 million U.S. dollars) in the previous year.
Cathay Pacific said in its annual reports that the fall in fuel prices caused unrealized mark-to-market losses of 7.6 billion HK dollars (1 billion U.S. dollars) on fuel hedging contracts for the period 2009-2011.
Group turnover rose by 14.9 percent to 86.58 billion HK dollars(11.17 billion U.S. dollars) in 2008, according to Cathay Pacific's annual reports.
The airline said business in the first six months of 2008 was generally strong, but extremely high fuel prices in the first half of the year and a plunge in both passenger and cargo demand in the second half as a result of the global financial crisis adversely impacted the financial results.
Cathay Pacific Chairman Christopher Pratt said in the report that the airline had made a "painful adjustment" to high fuel prices, and the aviation industry now has to adjust to a severe economic downturn.
"Cathay Pacific expects an extremely challenging year in 2009. Passenger and cargo demand are expected to remain weak and, if fuel prices remain at their present levels, further losses on fuel hedging contracts will be incurred," Pratt said.
Up to the end of February 2009, Cathay Pacific's unrealized mark to market losses on fuel hedging of 1.9 billion HK dollars ( 245 million U.S. dollars) have been incurred in 2009, compared with 7.6 billion HK dollars (1 billion U.S. dollars) for the whole of 2008, according to its annual report.
Pratt said the 2009 losses principally reflect reductions in the forward prices payable for fuel during the periods in which the relevant fuel hedging contracts will mature.
"Despite current difficulties, Cathay Pacific will continue to offer a superb international network through the Hong Kong hub, bolstered by the synergies with our sister carrier Dragonair and a continued strong relationship with Air China," he said.