Cathay Pacific to face pressure from economic slowdown in U.S./Japan

HONG KONG (AFX-ASIA) - Cathay Pacific chairman James Hughes-Hallett said the company is likely to face pressure from unappealing economic conditions in the U.S. and Japan. "It will be a challenging year in 2001 in terms of optimising the use of our new equipment, in terms of constant improvement of our products, and in terms of the economic slowdown in the U.S. and Japan," he said at a press conference to announce the company's 2000 results. However, he said that the company will adhere to its expansion plans, adding seven aircraft this year. "We have an order for 14 aircraft, seven of which will arrive this year," he said. "Further fleet expansion will depend on external economic factors, and we will be taking a long-term view in terms offleetexpansion," he said. He said fuel costs could be a negative factor for the company in 2001, but this would not deter plans for business expansion. "It is difficult to get rid of the impact of fuel costs, because they are determined by the market. But we have some hedging measures ... our aircraft are quite new, and more effective in terms of fuel consumption," said Philip Chen, the company's Chief Operating Officer. Chen said the company saved 10 pct of total fuel costs by hedging measures in 2000. Commenting on the 2000 results, Hughes-Hallett said Cathay's net profit had reached a new historical high, compared with the previous record of 3.8 bln hkd in 1996. "Our subsidiaries and other associate companies like Cathay Catering and HAECO grew strongly," he said. The company posted a net profit of 5.00 bln hkd in 2000, compared with 2.18 bln the previous year. Looking forward, he said the company will face fierce competition, but it will continue to develop its e-business and expand its business interests in other parts of the world, including China. "Some other airlines have laid off people in their e-business unit, but we are taking on new people. We hope to contribute to the development of Hong Kong, as a premier Asian aviation hub," he said.

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