Trump is Threatening Cathay Pacific’s Recovery

Cathay Pacific finally had positive news for their shareholders on Wednesday, annual results showed the carrier swinging back to a profit in the second half. However, Bloomberg shares that there’s trouble on the horizon. Cathay Pacific’s passenger operations accounts for less than half of its total capacity.  The remainder comes from what is actually the world’s 4th largest cargo airline, with a fleet of 22 jets (after only FedEx, Emirates, and UPS).

That business will be heavily threatened by President Trump’s new war on Chinese exports. Sadly, the uptick for Cathay was fueled by the cargo business (its best performance since 2014). Passenger revenue actually continued to fall, down 3.3% for the year.

Electronic parts, mobile phones and computers make up the lion’s share of air exports from Hong Kong. Trump will target those sectors in his next wave of tariffs against China, Reuters reported Tuesday, citing people it didn’t name who had discussed the matter with the administration.

Executives at the airline are hoping that the threats are simply talk as they contend that passenger numbers are likely to remain steady or potentially even fall a bit more.

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Comments

  1. I hear it’s a bear market for illegal immigration, high personal income taxes and bad trade deals because of Trump. I’ve got no problem with any of it.

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