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Review of 2017，Cathay Pacific’s passenger and cargo business has improved，Especially the freight business has increased significantly，But the competitive environment of Cathay Pacific has not changed significantly，Airlines from the mainland are still opening international routes，A threat to Cathay Pacific’s business。On the other hand，In addition to operating costs including wages，Fuel hedging continues to have an adverse impact on Cathay Pacific’s earnings。

First half of last year，Cathay Pacific’s fuel hedging loss 32.HK$3.7 billion，Although it decreased 188bet app download by 27% year-on-year.91%，But the impact on the company cannot be underestimated。According to analysis，Cathay Pacific’s fuel hedging losses last year will reach 64.HK$500 million，That is, 4 consecutive years of losses。

Fuel hedging is actually a rule of the game in the international aviation industry，Airlines lock in costs through a set of fuel derivatives，Thus resisting the risk of sharp rise in oil prices，When oil prices are not volatile，Fuel hedging can provide relatively stable returns，But once oil prices drop significantly，The airline will bear certain economic losses。

Although Cathay Pacific has reduced its fuel hedging ratio，But the hedging effect still exists，Because the hedging contract was locked a few years ago。Corrine Png, CEO of industry research firm Crucial Perspective，Reduced fuel hedging contract period from four years to two years at Cathay Pacific，Plus oil prices are expected to fall，Cathay’s hedging operations should turn a profit in 2019。

Also，Cathay Pacific still faces challenges from mainland Chinese airlines。According 188bet sports betting app download to statistics，Air China、China Eastern Airlines、Both China Southern Airlines and Hainan Airlines increased their capacity last year faster than Cathay Pacific，Especially since HNA launched flights from Chengdu and Chongqing to New York last year。In addition to these four giants，Sichuan Airlines ordered 10 A350s，And it has also opened a number of routes to Europe and the United States。

Last year，After Cathay Pacific’s new CEO Rupert Hogg took office，Introduced a series of measures，These include layoffs and a three-year recovery plan。Also，Last year，Cathay Pacific introduces Qatar Airways, one of the three major airlines in the Middle East, as its shareholder，It is expected to improve the operating efficiency of routes。

For Cathay Pacific，High labor costs are a problem that companies have to face。According to analysis，In terms of average income generated by unit employees，Cathay lags behind major Asian rivals，Including Singapore Airlines、Qantas、Japan Airlines、Virgin Australia, etc.，In other words, Cathay Pacific still has 188bet sports betting app download room to reduce labor expenses。

*Source of this article: Interface News，Author: Luo Songsong，Original title: "Cathay Pacific expected a loss of HK$2.7 billion last year, but the competitive situation is still not optimistic》.