Domtar Corporation sets up new sales office

Domtar Corporation opened a market pulp sales office in Hong Kong, operating as Domtar Asia Limited, on August 1. The company's primary objective is to provide direct sales and sales services to its current and future Chinese customers.

Listed in North America, Domtar is an integrated manufacturer and marketer of uncoated free sheet paper. The company is also a manufacturer of paper grade, fluff and specialty pulp. Domtar designs, manufactures, markets and distributes a wide range of business, commercial printing and publishing as well as converting and specialty papers. In addition, Domtar produces lumber and other specialty and industrial wood products.

“By establishing a physical presence in Hong Kong, we are solidifying our commitment to a dynamic and growing Chinese pulp market,” said Vice-President of Domtar Asia David Liang. “Not only will we be able to better serve our customers, through direct relationships and services, but we also have the opportunity to develop and grow our client base.”

Associate Director-General of Investment Promotion at Invest Hong Kong, Charles Ng, warmly welcomed Domtar’s business presence in Hong Kong. He said, "The opening of Domtar's pulp sales office in Hong Kong signifies a vote of confidence in Hong Kong as the preferred location for foreign companies to manage their Asia businesses."

Thomas Pink opens Hong Kong boutique

Thomas Pink, the internationally renowned British luxury shirt-maker, announced July 31 the opening of its first boutique in Hong Kong. The new boutique is situated at Pacific Place, Admiralty, one of the city's luxury shopping malls.

Rooted in the 18th century heritage of London’ Jermyn Street, Thomas Pink specializes in the design and production of quality shirts and associated accessories for men and women. The Hong Kong boutique will offer a wide range of luxury shirts in modern designs and quality fabrics, as well as a rich selection of ties and accessories to complement the garments. Each purchase will be wrapped in the brand's signature pink and black packaging.

Melcher’s Group,Thomas Pink’s franchise partner in Hong Kong,is responsible for the development of the brand in the Hong Kong and Macau markets. Next on the agenda are additional retail outlets in Hong Kong.

Cathay Pacific profit tops US$104 million

The Cathay Pacific Group reported a profit of US$104.1 million for the first six months of 2009. This compares to a loss of US$97.43 million in the first half of 2008. Earnings per share rose by US5.11 cents to US2.64 cents. The profit declared is primarily a result of a US$269.23 million unrealized mark-to-market fuel hedging gain.

Overall, Cathay Pacific has been hit by a deep and sustained downturn in its key markets, with sharply reduced passenger and cargo revenues resulting in a 27.1% drop in turnover to US$3.96 billion for the first six months. The airlines made an operating loss of US$98.07 million in the first half of the year before fuel hedging and tax.

On the passenger side, Cathay Pacific saw a fall in premium business as many major corporate clients, particularly in the financial sector, either reduced or downgraded travel. Load factors in the economy class cabin were maintained at high levels but a combination of low fares, due to strong competition in the market, and the impact of the stronger dollar reduced revenue. The number of passengers carried by Cathay Pacific and Dragonair fell 4.2% to 11.9 million against a 2.1% capacity reduction. The overall passenger load factor fell 1.5 percentage points to 78.5%.

Cargo demand remained very weak. The amount of freight carried by both airlines fell 15.3% compared with the first half of 2008 to 700,693 metric tons. The cargo load factor fell 0.2 percentage point to 66.2% while capacity was reduced by 14.1% in response to the sustained fall in demand.

Fuel prices fell significantly compared to the first half of 2008 but remained higher compared to previous years. Fuel prices rose rapidly in the second quarter with May recording the largest monthly rise in 10 years. This increase was not matched by the fuel surcharges approved by the Hong Kong Civil Aviation Department. Cathay Pacific’s and Dragonair’s surcharges remain below those charged by most of the airlines’ international competitors. There were gains on fuel hedging contracts in the first six months of 2009, with unrealized mark-to-market gains of US$269.23 million compared to losses of US$974.35 million for the whole of 2008. These gains reflect increases in the forward prices for fuel during the periods in which the relevant fuel hedging contracts will mature.

Cathay Pacific continues to take delivery of new, more efficient aircraft, with two more Boeing 777-300ER “Extended Range” aircraft entering the fleet in the first half of 2009 and the last of six Boeing 747-400ERF “Extended Range Freighters” arriving in April. Simultaneously, the airline accelerated the retirement of the older, fuel-inefficient Boeing 747-200/300 “Classic” freighters. They have all now left the fleet. In response to the substantial reduction in cargo demand, the company has taken six of its Boeing 747-400BCF “Boeing Converted Freighters” out of service — five from Cathay Pacific and one from Dragonair. One of these has been wet-leased to Air Hong Kong. A total of six passenger aircraft will also be parked.

Cathay Pacific continues to work with aircraft manufacturers with a view to deferring some of the deliveries of aircraft on firm order and has deferred other capital expenditure. Staff were asked to join an unpaid leave program, which received strong support from employees around the world and will play an important role in reducing overheads.

In response to the downturn, Cathay Pacific reduced passenger capacity by 8% and cargo capacity by 11% beginning May, while Dragonair reduced passenger capacity by 13%.

Airline passenger numbers down in July

The combined Cathay Pacific and Dragonair traffic figures for July 2009 show another significant fall in passenger numbers compared with the same month last year. There was also another year-on-year drop in cargo and mail tonnage. The figures highlighted the adverse impact of Influenza A (H1N1) and the continued impact of the global economic downturn.

In July, Cathay Pacific and Dragonair carried a total of 2,080,326 passengers — down 9.9% year-on-year — while capacity for the month, measured in available seat kilometers (ASKs), fell 7.5%. The month’s load factor fell 0.6 percentage points to 83.5%. The number of passengers carried year-to-date dropped 5.1% compared to a capacity decline of 2.9%.            

The two airlines carried a total of 133,233 metric tons of cargo and mail last month, down 6.7% year-on-year while the cargo and mail load factor rose 6.6 percentage points to 72.6% due to capacity decline. Capacity for the month, measured in available cargo/mail tonne kilometres, was 12.6% down. Year-to-date tonnage fell 14.1% compared to a capacity drop of 13.9%.

    
July airport traffic figures stabilize

Air traffic at Hong Kong International Airport (HKIA) further stabilized in July, with year-on-year drops in passenger throughput, cargo tonnage and air traffic movements narrowing from the previous month. Cargo traffic saw an improvement from the double-digit plunges that had been recorded since November 2008. In July, the airport handled a total of 291,000 metric tons of cargo, 4 million passenger trips and 23,315 air traffic movements, representing year-on-year decreases of 8.3%, 9.5% and 9.9%, respectively.

While the volume of cargo exports declined by approximately 13% year on year, imports and transshipments showed a low single-digit decrease as compared to same period last year. Key export markets experiencing double-digit drops included Europe, North America, Southeast Asia and Japan.

On the passenger side, Hong Kong residents showed a yearly growth of around 3%, while visitors declined by around 17% and transfer/transit passengers dipped approximately by 10%. Key visitor markets impacted included Southeast Asia, mainland China, Taiwan, North America and Japan.

Chief Executive Officer of the Airport Authority Hong Kong Stanley Hui said the public’s receding concern over Influenza A (H1N1) and the summer travel peak were the two major reasons behind July’s comparatively better performance in passenger traffic.

“The latest figures indicate that the downward momentum may have slowed,” said Mr. Hui. “While we believe air traffic figures will see milder drops in the months ahead, it will take some time before overall traffic performance returns to pre-crisis levels. The business climate is still challenging as economic activities remain low and this couples with the difficult operating environment for the aviation industry would continue to affect the pace of recovery.”

For the first seven months of the year, HKIA's passenger traffic was down by 8.4% to 26.4 million, while cargo throughput dropped 18.1% to 1.8 million metric tons and aircraft movements slid 8.0% to 161,605.