July 18, 2019 / 4:27 AM / 2 months ago

Cathay Pacific sees pressure on yields due to intense competition

FILE PHOTO: A passenger walks to the First Class counter of Cathay Pacific Airways at Hong Kong Airport in Hong Kong, China April 4, 2018. REUTERS/Bobby Yip/File Photo

(Reuters) - Hong Kong’s Cathay Pacific Airways Ltd (0293.HK) said on Thursday it expected yields, a proxy for airfares, to be under pressure in the coming months as performance in North America and Europe lags expectations due to intense competition.

Long-haul destinations have performed below expectations, especially on the yield front, the airline said in a statement.

Cathay said last month that its yields had come under “tremendous pressure” due to declining travel demand, especially to and from long-haul destinations.

Meanwhile, geopolitical tensions continued to be a bane for the airline’s cargo business, with freight volumes declining 9.1% in June from a year earlier and nearly 6% in the first six months of the year.

The cargo business is unlikely to see a rebound in volumes in the coming months, Cathay Pacific Director Commercial and Cargo Ronald Lam said.

Global airlines in June slashed a widely watched annual industry profit forecast by 21% as an expanding trade war and higher oil prices compound worries about an overdue industry slowdown.

Reporting by Aditya Soni in Bengaluru; Editing by Muralikumar Anantharaman

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