Cathay Pacific shares jump on improving passenger yields

World
Europe

Shares in Hong Kong’s Cathay Pacific Airways Ltd climbed 4 percent on Thursday after the company said airfare prices were continuing to recover after a long period of decline.

The carrier on Wednesday posted a smaller-than-expected annual loss of 1.26 billion HK dollars (160 million US dollars) due to a rebound in the cargo market, a slower pace of decline in ticket prices and lower fuel hedging losses.

In presentation materials for its analysts call, Cathay Pacific said passenger yields, a proxy for airfares, had fallen by only 1.5 percent in the second half of 2017, compared to a 5.2 percent decline in the first half.

“Passenger yields continue to improve,” Cathay Pacific said.

Rivals Singapore Airlines and Qantas Airways also reported smaller yield declines in the second half of last year as fuel prices rose.

BOCOM International Research analyst Geoffrey Cheng said Cathay’s management team was confident about 2018, with the outlook brighter for both passenger and cargo operations.

He raised his price target on the stock to 15.50 HK dollars from 14.50 HK dollars. Shares reached 14.38 HK dollars, the highest level in two and a half years, during morning trade on Thursday.

Source(s): Reuters