Business News

HONG KONG, Oct 13 (APP/AFP): Shares in Hong Kong flag carrier Cathay Pacific plunged more than five percent Thursday after it scrapped its profit outlook for the second half of the year, citing competition and overcapacity. The Hong Kong-based firm said it no longer expected business to improve in the latter half of the year — a departure from its previous forecast. Net profit for the first six months of the year stood at HK$353 million ($45.5 million). Shares in the company were trading as low as HK$10.16 ($1.31) per share, down 5.58 percent from Wednesday’s close. “Since the interim report was issued, the outlook for our airlines’ business has deteriorated,” company secretary David Fu said in statement issued late Wednesday to the Hong Kong Stock Exchange. “It is no longer expected that the Cathay Pacific group’s results for the second half of 2016 will be better than those of the first half,” it said, adding the firm was engaged in a “critical review” of its operations against a “difficult revenue picture”. Despite a rising appetite for air travel in Asia-Pacific the Hong Kong airline is competing against firms that are aggressively expanding in the region as well as low-cost carriers. “Overcapacity and strong competition is putting particular pressure on our passenger business, with continued shortfalls in revenue compared with forecasts and heavy pressure on yield,” he said.