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Cathay Pacific Airways Limited


12 March, 1997

FOR IMMEDIATE RELEASE

CATHAY PACIFIC CARGO 1996 ANNUAL RESULTS

Cathay Pacific Cargo reported turnover of HK$6,107 million (US$783 million) in 1996, an 5.6 percent increase over 1995. The figure is equivalent to 20.5 percent of Cathay Pacific Airways total traffic turnover.

Cathay Pacific carried 568,000 tonnes of cargo last year, up 7.0 percent on 1995. Cargo revenue tonne kilometres were up 14.0 percent against an increase of 15.9 percent in cargo capacity (measured in available cargo tonne kilometres). Cargo and mail load factor decreased marginally to 66.9 percent.

"We faced some serious challenges in 1996 but, overall, we have been able to return a satisfactory result," said James Barrington, Cathay Pacificís General Manager Cargo. "Yields faced enormous downward pressure on almost all routes at the beginning of the year, but we were able to counter that with a rate increase in the latter part of the year."

Load factors have been high throughout the year and capacity increased significantly due to the replacement of L1011 TriStars with larger Airbus Industrie A330-300s and A340-300s, which have more cargo space in their bellies. The retirement of the TriStars signalled the completion of the first stage of Cathay Pacificís HK$70,000 million aircraft acquisition programme. Already, aircraft valued at HK$24,000 million have been delivered and outstanding orders and options are valued at a further HK$46,000 million, including three A340-300s ordered in September 1996.

Cathay Pacific launched a new freighter service to New York in 1996 and overall capacity is expected to increase by more than 2.8 percent in 1997. In addition, freighter crews sourced by Aircrew Services Ltd have begun to operate Cathay Pacific freighters and the savings in air crew costs have begun to bring operating expenditures into line with other cargo operators.

"If yields can be maintained the cargo side of the airline looks very promising in 1997," said Mr Barrington. "We have an excellent network, costs are under control, and load factors continue to be high. However, competition is intense, and we cannot afford to become complacent."


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