Cathay profit surges but falls short of estimates amid competition

[HONG KONG] Cathay Pacific Airways Ltd, Asia's biggest international airline by passengers, reported profit that lagged behind estimates as competition with Middle East carriers held down fares and losses from affiliates widened.

Net income jumped 14-fold to HK$347 million (S$56 million) in the six months ended in June, Cathay said in a stock exchange statement yesterday, compared with the HK$462 million median profit estimate in a Bloomberg News survey of eight analysts. Hong Kong-based Cathay forecast business "to be better" in the second half of the year.

Passenger yields fell in the first half amid competition with Emirates and Etihad Airways, which are challenging Asian airlines offering features such as showers and butlers. Chief executive Ivan Chu has ordered new planes and is adding flights to the US and Europe even as a weakness in the cargo market that started with the global financial crisis persists.