Source: Channel NewsAsia Author: Asha Popatlal 06/04/2009
Subject Concerned: Opinion Airlines Cargo
Cathay Pacific said it has no plans for a rights issue to raise cash.
The comment came from CEO Tony Tyler during an investor conference in Singapore on June 4.
Airlines across the globe have come under tremendous strain as the current economic downturn keeps passengers away. They also saw a drop in their cargo business and were hurt by volatile oil prices.
Cathay Pacific booked a record loss of US$1.1 billion for the last business year. But there was some good news from the airline's CEO at the conference. He said the carrier's cargo revenues and volumes have stabilised.
In the aviation industry, the cargo market is seen as leading the passenger market.
The CEO admitted that Cathay's balance sheet may still be under strain, but he said there are no plans for a rights issue. According to him, the Hong Kong flagship has enough resources to weather the current storm, and it sees no problem financing its plane orders.
Cathay has already taken a number of measures to cope with the downturn - from cuts in capacity to asking staff to take unpaid leave, and delaying delivery of two Boeing 777-300ER planes.
One aviation analyst was also optimistic that the skies are clearing. Damien Horth, head of Asian Transport Reseach at UBS, said: "We seem to have found a floor with very limited signs that things are getting better. I think we'll see a turnaround in cargo (volumes) pretty quickly."
"We've seen a big de-stocking in America and North Europe over the last 6 months. By the time we get to Q4, we'll have a low base and ... we'll probably be seeing growth again."
This may somewhat come as a reprieve for heads of airlines across the world who are gathering next week in Kuala Lumpur for a conference on the challenges facing the sector.