Hong Kong-based airline Cathay Pacific Wednesday announced its first full-year loss since the 2008.
The group reported an attributable loss of 575 million HK dollars (about 74 million U.S. dollars) for 2016.
The loss per share was 14.6 HK cents compared to earnings per share of 152.5 HK cents in the previous year.
The total revenue in 2016 dropped 9.4 percent to 92.8 billion HK dollars. The group's passenger revenue in 2016 was 66.9 billion HK dollars, a decrease of 8.4 percent from 2015.
The group's cargo revenue in 2016 was 26 billion HK dollars, a decrease of 13.2 percent compared to the previous year.
Total fuel costs for Cathay Pacific and Cathay Dragon (before the effect of fuel hedging) decreased by 4.9 billion HK dollars compared with 2015.
Fuel remains as the group's most significant cost, accounting for 29.6 percent of total operating costs in 2016.
The company ascribed the decrease of profit to intense competition and economic slowdown. According to Cathay Pacific chairman John Slosar, the operating environment for the group's core airline business was difficult in 2016.
Intense and increasing competition with other airlines was the most important.
Other airlines significantly increased capacity. Competition from low cost carriers increased. Overcapacity in the market was a particular competitive problem for their cargo business.
John Slosar said three economic factors were also important including the reduced rate of economic growth in the Chinese Mainland, a reduction in the number of visitors to Hong Kong and the strength of the Hong Kong dollar.
In response to weak revenues, the company has undertaken a critical review of its business. In the short term, Cathay Pacific implements measures designed to improve revenues and reduce costs.
The longer term strategy, which is being developed in response to the review, is designed to improve performance over a three-year period.
"Despite the challenges with which we are faced, we still expect our business to grow in the long-term," John Slosar said.
"Air traffic to, from and within the Asia-Pacific region is expected to grow strongly. We will continue to introduce new destinations and to increase frequencies on our most popular routes. We are buying new and more fuel efficient aircraft. This will increase productivity and reduce costs."
"The group will continue to make investments designed to strengthen the service to customers. It aims to deliver better services and to do so more effectively through the use of data analytic and mobile technology. The group will also review their revenue management, distribution and pricing practices."
