15 Jan 2009

Agreement on Deferral of Completion of Third Cargo Terminal

In response to media enquiries, a Cathay Pacific spokesman confirmed that Cathay Pacific Services Limited (CPSL), a wholly owned subsidiary of Cathay Pacific Airways Limited, had signed a supplemental agreement with the Airport Authority Hong Kong (HKAA) to defer the completion of its new cargo terminal by a maximum of 24 months to mid-2013. The supplemental agreement was signed by both parties today.

The spokesman said that the decision to apply for the deferral of the cargo terminal was taken in response to market conditions brought about by the global economic downturn. The deferral is aimed at better matching supply and demand in the airfreight business given the current market outlook. It is also important for the company to maintain a strong balance sheet until the market strengthens.

He emphasized that Cathay Pacific remains completely confident in the future of Hong Kong as an international air cargo hub.

"Cathay Pacific remains fully committed to building and operating the third cargo terminal," the spokesman said.

The spokesman added that under the agreement, CPSL will compensate the HKAA for the deferral. While the company is not at liberty to disclose commercially sensitive information, it considers the compensation amount to be fair and reasonable.