Rising fuel costs and the threat of a trade war will not affect Cathay Pacific’s plan to turn in a profit in 2019, Chief Executive Rupert Hogg said on Monday as the airline seeks to recover from two straight years of losses.
The flag carrier of Hong Kong is currently in the midst of a three-year turnaround plan to keep costs low and improve revenue. That should help the airline to compete better and return to profitability next year, Hogg said.
“I’m not going to make any forecast about our future but that’s our target and at the moment, we are on track to do that,” he told CNBC’s Matthew Taylor at the IATA Annual General Meeting in Sydney.
The recent rise in oil prices and growing trade protectionism globally, which are typically bad news for the airline industry, have not threatened the company’s strategy, the CEO said.
He explained that the airline has not been impacted in a big way by the higher oil prices because of its many young aircrafts. At an average age of 5.5 years old, Cathay’s planes don’t consume as much fuel as their older counterparts, he added.
“What that means in sum is that, although the price of fuel is rising, our consumption is not growing as fast as the units of production we are putting into the air,” he said.