HONG KONG'S : CATHAY PACIFIC

Hong Kong's airline Cathay Pacific sees annual loss, outlook upbeat.

HONG Kong flag carrier Cathay Pacific on Wednesday booked the first back-to-back annual loss in its seven-decade  history but said it was in black for the second half and was upbeat about the next year.

The firm's report was the its worst since 2008 during the global financial crisis, as lower-cost Chinese airlines ate into market share while it took a major hit from fuel costs.

''Increased fuel costs are increasing operating costs  and adversely affecting results,''  chairman John Slosar said in a statement.

However, while it posted a  net loss of  HK$ 1.26 billion [$161 million] , that was much better than the HK$2.26 billion forecast in a survey by Bloomberg News.

The news was greeted by a surge more than three percent surge in the firm's share price in afternoon Hong Kong trade, although the gains were later pared.

Cathay suffered a HK$ 2,05 billion in the first six months of the year but that was narrowed by a healthy second-half, when it shifted into the black.

The second-half results were boosted by improved premium class demand and a strong cargo business, with Slosar saying an better economic outlook also helped.

Fuel hedging costs fell to HK$ 6.38 billion in 2017 from HK$8.45 billion the previous year.

However, fuel was still the most significant outlay, accounting for 30 percent of operating costs at  HK$31.11 billion, compared with HK$27.95 billion in the year before.

Huarong International Securities analyst Jackson Wong said the company still had the edge over its rivals in terms of reputation in the premium market-

But needed to take a broad approach to compete with budget carriers.

''Whether they can regain the market share is really the key,'' Wong told AFP.