14 July 2008

Soaring oil forces Cathay to hike fares

Cathay Pacific is hiking premium fares to and from Hong Kong by as much as 15% in an effort to help offset soaring fuel prices.

The Hong Kong carrier is also redeploying aircraft for the winter.

First and business class fares have gone up from today (Friday) by between three and 15%.

The moves follow a profit warning from the airline last week.

Cathay warned that its financial performance was being "materially and adversely affected" by the high price of jet fuel.

The average price paid by the airline in the first half of 2008 was 60% above that paid in the first half of last year.

Chief executive Tony Tyler said: ââ¬ÅâœWhat we are facing at the moment is a cost problem, not a revenue problem.

ââ¬ÅâœDemand remains high but the soaring cost of fuel means we have to operate more flights to areas with revenue-earning potential.

ââ¬ÅâœWe will not take a ââ¬Ëœslash and burnââ¬â¢ approach to the problem ââ¬' itââ¬â¢s important to preserve our network as Hong Kongââ¬â¢s home carrier and we aim to keep our team together.

ââ¬ÅâœDuring this difficult period we need to work to maximise our revenue.

ââ¬ÅâœOf course we regret having to charge passengers more, but the increase in our fuel bill is too great for us to absorb.

ââ¬ÅâœWe have to ask our passengers to pay more for their flights, either through increased surcharges or by increasing fares.ââ¬~

Winter flights to Canada are being re-arranged and an Anchorage service is being suspended.

The airline continues to fly non-stop from Heathrow to Hong Kong four times daily.

by Phil Davies

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