Cathay Pacific buffeted by bad year

In March, the airline reported a HK$542 million net loss, its first full-year loss in 35 years, after posting a HK$1.69 billion full-yearprofit in 1997. Analysts expect another tough call when Cathay reveals its first-half results on August 11, with many still waiting until the last minute before issuing profit or loss forecasts. Arthur Law, who follows the company for Core Pacific-Yamaichi International, expects a net profit of HK$220 mn for the 6-month ended June 30.

Analysts said it was difficult to put a figure on the cost of the pilots’ disruption to the airline because it involved assessing how much Cathay paid for long and short term charters, how much it paid for other costs, including housing stranded passengers and how Cathay accounted for other costs. "It’s not an easy one to forecast for all the obvious reasons," said S.G. Securities analyst Ian Wild. But analysts estimated lost revenue alone of up to HK $ 500 million and are generally bearish on the company, with few recommending it to investors.

"You’re going to be into the hundreds of millions (of Hong Kong dollars)," said Paribas Asia Equity analyst John Hetherington, whosaid he estimated conservatively that the airline’s lost revenue was HK $ 300 million to HK$500 million. The company has declined to comment on the cost of the disruption, saying it would be revealed in its interim result on August 11.