Cathay’s cargo business down 30 per cent ‘in line with Hactl’, says Tyler
- Friday, 13 February 2009
CATHAY Pacific’s cargo business is “really hurting” and according to the airline’s chief executive Tony Tyler its figures are inline with Hong Kong Air Cargo Terminals (HACTL), which has seen a 30 per cent reduction in cargo traffic in January compared with the same month last year. “That’s a massive amount of revenue lost,” he said.
Tyler was replying to questions in the airline’s magazine — CX World — about Cathay’s 2008 losses — a record HK$8.6 billion — and how the carrier will face up to the challenges ahead.
In answer to “whether the bleeding” for the airline’s cargo business could be stopped, Tyler said: “The problem with cargo is that we can’t really stimulate the market by offering price promotions.
“If importers aren’t ordering goods from the markets we serve, the cargo simply isn’t going to move. What we have to do is ensure we are capturing our fair share of whatever market is there. For example, in Hong Kong we’ve done a lot to use our strength in the market to get commitments from forwarders and shippers.”
Asked what message he had for staff at this difficult time, Tyler said he wanted employees to understand the seriousness of the carrier’s situation.
“This is not management crying wolf or scare-mongering; this is for real,” he exclaimed. “The outlook for our revenue is very poor and it could be a long time before we see the bottom of the market, let alone see any signs of recovery.
“It may be necessary to take some very difficult decisions about our network and about the company generally in order to secure the sustainability of this business. In the meantime, the way that we can all help is to focus on doing our jobs as well as we possibly can. That’s the best way we can contribute the welfare of the company.
“Cathay Pacific is a great, strong and resilient company and it’s that way because of all we’ve done as a team over the years to build it up. Now we have to use all the strength and resilience we have to keep it great so that we can get through this turbulence. We want to be around and in good shape to take advantage of the recovery when it comes. I know it will come — I just wish I knew when,” said Tyler.
On its huge 2008 loss, the Cathay chief admitted it was a worry. “A lot of those losses are to do with unrealised fuel hedging losses, but I have to stress that the our airlines — CX and KA together — made significant operating losses last year — larger than we’ve ever had before. Even if we hadn’t hedged a gallon of fuel we’d have made record losses.
“However, 2008 is already in the past — the big worry now is the outlook for the future,” added Tyler.
— John Newton
