Mar 16, 2017 08:11 AM EDT
Cathay Pacific Airways reports its first full-year loss, on Wednesday, since the 2008 global financial crisis. The poor results were due to overcapacity, lack of seats and competition from mainland Chinese carriers.
Shares of Hong Kong's flag carrier dipped almost seven percent following the news. Cathay posted a net loss of HK$575 million for 2016, which was down from an HK$6 billion profit from the previous year. This is the third time the company posted a full-year loss since it was founded in 1946.
Cathay Pacific says the results were brought by falling demands for premium class seats on long-haul routes. It is also facing fierce rivalry from mainland Chinese and Middle Eastern airlines that are expanding in the region. Carriers such as Air China and China Eastern offers direct services from the mainland, which makes it convenient for passengers to travel in their country than fly to Hong Kong.
The airline has typically held up its premium services but business has faltered because of mainland carriers as well as budget airlines luring away passengers with cheap fares. Accordingly, intense competition contributes to sales dropping by 9.4 percent. Cathay Pacific acknowledges the competitive landscape and plans for a review of its business. The airline sets on cutting jobs and consider shifting some flights to its short-haul arm as part of its three-year program.
"Our organization will become leaner," Cathay Pacific said in a statement to the Hong Kong exchange on Wednesday. The group's revenue dropped more than nine percent to HK$92.75 billion while passenger yields, which refers to the average fare paid per mile per customer, tumbled 9.2 percent to $0.54. In addition, Cathay also failed to take advantage of the full benefit of low fuel costs brought on by weak crude oil prices. It plans to cut costs in the long term by buying new and more fuel-efficient aircraft.
Cathay chair John Slosar affirms the difficulties in 2016 due to many factors that adversely affected their performance. Although several steps are in progress, Slosar expects the operating environment in 2017 to remain challenging.
Retailers can manipulate consumer regret to beat competitors
The French luxury group gains full control of the 70-year-old Parisian fashion house Christian Dior in a mammoth deal worth around €12.1 billion.
UK luxury fashion retailer Burberry posts lackluster set of results for its second half following an impressive result in the third quarter, a retail analyst stated.
What seemed like a perfect hacking operation turned out to be a failure as Kaspersky has spotted a mistake on the part of the Lazarus hackers. It found a brief connection that came from North Korea - proving their identity and origin.
A lawsuit has been filed by a Democratic political consultant and Fox News contributor on Monday alleging, among others, that Roger Ailes denied her of a permanent hosting job after she turned down his sexual advances.
South African leader, Jacob Zuma, has sacked finance minister Pravin Gordhan in a move that drove the country's currency down five percent in value. The president calls for a midnight reshuffle in his Treasury members who he felt were disloyal to his political intentions.
The US president has long promoted a change on how foreign businesses should run their operations - and that is to revive American manufacturing. Uniqlo head showed he didn't like being given an ultimatum by Trump.
Cemex, one of the world's largest cement producers, has not participated in the first round of bids that is currently underway but said it is open to providing quotes to supply the raw materials for Trump's promised border wall.
Arket, which means 'sheet of paper' in Swedish, will cater to a modern-day market with products for men, women, children and the home.