August 8, 2002	Thursday	Jamadi-ul-Awwal 28,1423

HONG KONG, Aug 7: Hong Kong-based Cathay Pacific Airways Ltd. said on Wednesday its net profit rose a better-than-expected 7.1 per cent in the first half, citing improving market conditions and rising passenger numbers.

Cathay said its net profit climbed to 1.41 billion Hong Kong dollars for the six months to June compared with 1.32 billion dollars last year. Analysts polled by AFP-owned financial news service AFX-Asia had forecast a net profit of 462-900 million dollars.

A surge in the number of travellers led Hong Kong’s flagship carrier to bring previously grounded aircraft back into service. The airline added it also restored services suspended after the September 11 terror attacks in the United States.

“The results reflected a steady recovery in market conditions,” Cathay Pacific chairman James Hughes-Hallett said in a statement.

“Subject to unforeseen circumstances, we anticipate continued demand in the coming months and an improved result in the traditionally stronger second half,” he said.

However, sales slipped 2.1 per cent to 15.51 billion dollars in the first half, from 15.84 billion dollars in same period last year.

Operating profits rose to 1.84 billion dollars from 1.04 billion dollars last year, mainly due to a 16.5-per cent drop in-flight service and passenger expenses and a 20.2pc reduction in fuel expenses.

Cathay also slashed operating expenses to 13.68 billion dollars from 14.80 billion dollars a year earlier.

Although total load factors were high, demand for business travel remained relatively weak, said Hughes-Hallett.

As a result, passenger yield declined to 45.4 cents from 47.3 cents in the same period, he said.—AFP