The Cathay Pacific Group reported a loss of HK$1.26 billion (US$161 million) attributable to its shareholders for 2017, compared to a loss of HK$575 million (US$73 million) in 2016, according to annual results released by the company.

This was despite a strong performance posted by the cargo business, with revenue having increased by 19.1% year-on-year to HK$23.9 billion (US$3.05 billion).

Cathay Pacific and Cathay Dragon carried a total of 2.06 million tonnes of cargo and mail in 2017, a year-on-year growth of 10.9%. Available capacity grew by 3.6% and the load factor was up by 3.4 percentage points at 67.8%. Yield increased by 11.3%, benefitting from the resumption of a fuel surcharge in Hong Kong from April 2017.

“Our priorities for 2018 are our transformation programme, changing the way that we work so as to better contain costs which will strengthen our passenger business further,” said John Slosar, chairman of Cathay Pacific. “We are confident of a successful outcome from these efforts. We also look to benefit from a slowing of the decline in passenger yields as global economic conditions improve. The outlook for our cargo business is positive and we will take best advantage of opportunities in the growing global cargo market. Increased fuel costs are increasing operating costs and adversely affecting results. Fuel hedging losses are declining.”

According to Cathay, China, India, South America and Europe all performed well for cargo. Intra-Asia demand was also significantly stronger than in 2016.

During 2017, Cathay retired two Boeing 747-400BCFs and wet-leased two 747-8Fs from Atlas Air.

In November, subsidiary Air Hong Kong agreed to enter into sale and leaseback transactions with DHL in respect of eight Airbus A300-600Fs. Five of these were completed in 2017, with the remaining three to be completed in 2018. At the end of 2018, Cathay will also acquire DHL’s 40% share in Air Hong Kong to become the sole shareholder of the carrier. Air Hong Kong will continue to support the DHL Express network under a new 15-year block space agreement.

Cathay Pacific Services Limited, operator of the Cathay Pacific Cargo Terminal in Hong Kong which serves Cathay Pacific, Cathay Dragon, Air Hong Kong and 14 other airlines, handled 2.1 million tonnes of cargo in 2017, a year-on-year increase of 16.7%.

“We are acting decisively to make Cathay Pacific and Cathay Dragon better airlines and stronger businesses,” said Slosar. “We believe we are on track to achieve strong and sustainable long-term performance. Our commitment to Hong Kong and its people remains unwavering, as has been the case over more than 70 years. We will continue to make strategic investments to develop and strengthen Hong Kong’s position as Asia’s largest and most popular international aviation hub.”