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Cathay Pacific books 7.6 billion HK dollar loss over oil hedging

by Staff Writers
Hong Kong (AFP) Nov 5, 2008
Cathay Pacific airline said Wednesday it would include a write-down of 7.6 billion Hong Kong dollars (974 million US) in its 2008 results due to potential losses on oil hedging contracts.

The Hong Kong carrier said in a statement to the Hong Kong stock exchange that the provision increased from 2.8 billion dollars in October as the oil price continued to decline.

It added that weakening customer demand would also hit its year-end results, which it expected to be "disappointing".

"Since (November) revenue has continued to weaken. First and business class traffic in particular have fallen significantly," the statement said.

"This decline and the impact of currency movements have caused a weakening of passenger yields. Advance bookings for the first quarter of 2009 are markedly down on the same period in 2008."

The statement added that the air cargo market out of Hong Kong and mainland China was also struggling.

Cathay said the potential oil hedge loss was booked after the prices tumbled 69 percent between July and the end of the year, although it said its realised losses so far were only 300 million dollars.

Fuel hedging contracts were taken out to counter the high cost of oil earlier in the year.

Cathay Pacific said last month its passenger and cargo traffic continued to drop in November as global demand was hit by the dire economic environment.

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India signs 2.1 bln dollar plane deal with Boeing
New Delhi (AFP) Jan 5, 2009
India has signed a 2.1 billion dollar deal with US aerospace giant Boeing to buy maritime surveillance aircraft for the Indian navy, officials told AFP Monday.

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