Cathay dives to record £100m loss

AIRLINE Cathay Pacific crashed to a record HK$1.24bn (£100m) loss in its first half, hit by the Sars virus which virtually halted traffic through Hong Kong's airport.

The performance is the worst since the airline listed in 1986 and compares with a profit of HK$1.41bn in the first half of last year. However, the loss was within market expectations of between HK$1.2bn and HK$1.4bn.

With fewer travellers and grounded planes, Cathay was losing £2m a day at the height of the crisis. When, in April, it was feared passenger numbers would fall to less than 6000 a day, it considered grounding its fleet. Peak volumes had been 100,000 passengers a day.

'This was, without a doubt, the most challenging period in Cathay Pacific's history,' the company said in a statement. 'The outbreak of Sars had a devastating impact on passenger numbers in the second quarter.'

While that crisis is now over, Cathay has new challenges, with its home base Hong Kong in political upheaval and coping with slow growth.

The global aviation scene is also gloomy, with international travel down and regional unrest, underlined by Tuesday's bombing of a top hotel in the Indonesian capital Jakarta, further dampening recovery prospects.