Cathay Pacific next in line for fare hikes

Cathay Pacific has become the latest airline to warn of rising ticket prices in response to the cost of fuel.

Announcing the predicted fare hike, the carrier also blamed government restrictions on maximum fuel surcharges for its HK$633 million (£42 million) first-half loss.

It argued that the measure - implemented by Hong Kong's Civil Aviation Department - will do little to protect the flying public from higher costs, as carriers will simply raise fees elsewhere.

Speaking to reporters, Cathay chairman Christopher Pratt said that the carrier's business model has been "severely challenged" by the rising cost of fuel, which topped $140 last month.

"The dramatic change to our fortune is down to one factor - the relentless rise in the prices of fuel," he asserted. "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."

Pratt's comments follow last week's warning by BA chief executive Willie Walsh that it too is planning to increase fares in response to the rising cost of fuel.

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