Cathay Pacific warns of fare increases

Cathay Pacific has entered the fray, becoming the latest airline to warn customers of its plans to raise tickets prices to help combat the high cost of fuel.

In announcing the expected hike in fares, officials for the carrier also blamed the government for its restrictions on fuel surcharge increases that have contributed to its HK$633 million loss for the first half of 2008.

The airline is arguing the government restriction, which was imposed by the Hong Kong Civil Aviation Department, does very little to protect travellers from higher ticket prices, as carriers are simply forced to raise other fees to make up the difference.

In speaking to reporters, the chairman of Cathay Pacific, Christopher Pratt, commented that the airline’s business model was “severely challenged” by sustained high fuel costs.

“The dramatic change to our fortune is down to one factor - the relentless rise in the prices of fuel,” he explained. “Cathay Pacific is reducing other costs where it can but there is a limit to how much cost can be saved before quality and brand are compromised.”

The chairman’s comments come not long after the warning issued last week by the chief executive of British Airways, Willie Walsh, indicating that they were also planning fare increases to offset high operating costs.

www.cathaypacific.com