Marco Polo

Cathay Pacific Airways bounced back into the
black with a net profit of $2.19 billion last year,beating even the most bullish forecasts by analysts.
The carrier posted a $542 million net loss in
1998 after booking one-off costs of $869 million from sacking staff and retiring old aircraft.
Operating profit for the year to December 31 was$2.82 billion, helped by lower staff expenses, commissions and depreciation and operating lease costs.
Cathay made an operating loss of $657 million
for 1998.
The carrier's fledging cargo business led a 7.86 per cent rise in overall turnover to $28.7 billion.
"Cathay Pacific is emerging from the recent
downturn in better shape than that in which we entered it," chairman James Hughes-Hallett said.
"With a more competitive cost structure, we are now well positioned to take advantage of new opportunities [presented by the Asian economic recovery]."
Earnings per share were 64.7 cents, double the consensus forecast.
Dividends also beat expectations, with a full-year pay out of 27 cents declared, against seven cents in 1998.
Robust demand for flights between Hong Kong
and the United States and a sharp upturn in
passenger traffic on the Manila and Seoul routes in the second half helped offset a sluggish first half.
Passenger numbers for the full-year rose 2.1 per cent to 10.5 million.
The airline filled 71.4 per cent of its seats last year, up from 67.5 per cent in 1998.
Cathay's cargo business, however, registered
the biggest turnover growth - of 20.64 per cent to a record $8.39 billion.
Cargo now accounts for nearly 30 per cent of the airline's business.
The strength of both passenger and cargo
figures surprised analysts.
They expected Cathay's outlook to improve
further this year as the regional economic
recovery gained pace and the benefits of
Cathay's cost savings came through.
The savings from new salary arrangements with
pilots, flight attendants and other staff were expected to offset fuel costs, which have nearly doubled.
Some analysts believed yields would also
recover further, despite statements by Cathay
that air fares would remain low indefinitely.
A one-off profit of $482 million from the sale of a 0.4 per cent stake in networking company Equant cancelled out the costs of two weeks of flight disruptions which resulted from a pay dispute with pilots in May.
Chief executive David Turnbull said more long
and short-haul aircraft would be ordered this year as a fleet expansion plan, halted by the onset of the recession in late 1997, was relaunched.
Mr Turnbull was tight-lipped on numbers, but
industry observers expected Cathay to order
more than 20 planes this year.
The airline will announce new orders for either medium or short-haul aircraft in the next six to eight weeks, which might include freighters to service regional markets.
Mr Turnbull said the airline would boost its
regional express cargo service this year in a bid to tap the expected boom in e-commerce by
corporate Asia.
And Cathay would launch more of its own
e-commerce proposals this year, said chief
operating officer Philip Chen Nan-lok.
Developing Web-based marketing and sales
network was among the firm's top priorities.
Mr Hughes-Hallett said that a liberalisation in Hong Kong's air-service agreement was unlikely to substantially increase the already strong competition from Cathay's rivals.