Cathay Pacific Airways Ltd. (00293.HK) urged the Hong Kong Airport Authority to push forward the construction plans for a third runway in the city to meet rising air traffic demand, the Hong Kong Economic Journal reported on Thursday.
Building the third runway will reduce flight delays at the Hong Kong International Airport, which has been getting increasingly congested, the airline’s chairman John Slosar was quoted as saying in a press briefing on the company’s interim results.
Slosar, however, said it would be better for the Airport Authority to raise the funds for the construction project by itself, instead of charging airport users.
Cathay incurred a loss of HK$3.74 billion from hedging on jet fuel for the first half of this year, the largest such loss over a six-month period in 10 years, following an unexpected decline in oil prices.
The company’s unrealized hedging losses fell to HK$7.4 billion as of the end of June from HK$10.1 billion at the end of last year.
The airline is expected to continue incurring such losses until 2017, analysts said.
Cathay has hedged against 63 percent of the jet fuel it will use this year at an average of US$91 per barrel.
Hedging accounts of 60 percent of its jet fuel needs at US$85 for 2016, US$89 for 2017, US$81 for 2018, and US$75 for 2019.
Hedging can help stabilize fuel costs, but the oil price unexpectedly tumbled to US$45 after surging in 2014, finance director Martin Murray said.
Despite the losses, the company posted its biggest half-year net profit since 2011, up nearly sixfold at HK$1.97 billion.
Slosar, meanwhile, said the company is satisfied with its current business model and has no plans to set up a budget airline despite increasing competition from low-cost peers.
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