Cathay Pacific Airways Ltd., Hong Kong’s largest carrier, forecast a better-than expected record annual profit on rebounding travel demand and asset sales.
Net income will likely be at least HK$12.5 billion ($1.6 billion) this year, the airline said in a statement today. That’s more than double last year’s profit and it surpasses the HK$11.7 billion average of 18 analyst estimates compiled by Bloomberg.
The airline’s passenger numbers surged 11 percent through October, while freight volumes leapt 20 percent, as business travelers resumed flying and Chinese exporters boosted shipments overseas amid the economic pickup. The carrier has also sold stakes in an air-cargo handler and a maintenance company, as well as benefiting from rising profit at affiliate Air China Ltd.
“Demand for both air travel and cargo has helped Cathay Pacific and that will translate into good earnings,” said Jay Ryu, a Hong Kong-based analyst at Mirae Asset Securities Co., who has a “buy” recommendation on the carrier. “With the economy recovering, business-class travel appears to be coming back and that could help lift earnings next year as well.”
Cathay said its forecast includes a HK$2.2 billion gain from the sale of shares in Hong Kong Air Cargo Terminals Ltd. and Hong Kong Aircraft Engineering Co. as well as a 57.1 million euro ($78 million) fine from the European Union tied to anticompetitive actions in the air-cargo industry.
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