Cathay Pacific Airways Ltd. said its annual profit tumbled by more than 80 percent because of high jet fuel prices, global economic uncertainty and weak demand for air cargo.
Hong Kong’s biggest airline on Wednesday blamed stubbornly high fuel prices for weighing down the results. Jet fuel is Cathay’s biggest cost, accounting for 41 percent of its total expense bill.
The airline said average fuel prices rose 1.7 percent and the “sustained” high price throughout most of 2012 “had a major impact on operating costs.”
Cathay said it was a “challenging year” for the aviation industry in general.
“Economic uncertainty, particularly in the euro zone countries, and an increasingly competitive environment added to the difficulties,” the airline said.
Profit from more lucrative business and first class tickets fell as companies cut back on travel while weak demand from major export markets, especially Europe, hurt the carrier’s air cargo business.
Cathay said 2012 profit fell 83 percent to 916 million Hong Kong dollars ($118 million) from HK$5.5 billion in 2011.
Earnings per share fell to 23.3 HK cents (3 cents) from HK1.40 a share the year before. It’s the company’s weakest full-year performance since 2008, when it lost HK$7.9 billion amid the global financial crisis.
The results include a first half loss of HK$935 million.
Revenue edged up 1 percent to HK$99.4 billion.
Cathay also owns regional Hong Kong-based carrier Dragonair.