Hong Kong Airline Back in Black
Aug. 11, 1999
HONG KONG (AP) _ Cathay Pacific Airways said Wednesday it swung back to profitability in the first half of the year, although its results were hit hard by a dispute with pilots that cost $64 million.
Cathay said it earned $13.8 million in the six months ended June 30. That compared with a loss of $22.4 million during the same period last year.
First-half revenues rose 1.4 percent to $1.7 billion.
``We are pleased that we have been able to return to profitability after facing extremely challenging conditions throughout 1998,'' said Cathay's chairman James Hughes-Hallett in a statement.
Although Cathay saw its fortunes improve in several markets, including the United States, Indonesia, Korea, and the Philippines, average fares remained weak, Hughes-Hallett said.
He noted that a January agreement with Cathay's flight attendants to fly more hours in exchange for a pay raise has boosted productivity and placed the company ``on a much better footing'' against its rivals.
An agreement with the airline's pilots on June 10 also boosted Cathay's competitiveness, Hughes-Hallett said. The pilots agreed to take an average 8 percent in pay cuts in exchange for stock options.
But before the pilots went along with the deal, they staged a sickout that grounded hundreds of flights and hit Cathay revenues hard. Cathay had not announced the cost of the dispute until Wednesday.