Cathay CEO Says Cargo Business Steadying

Cathay Pacific's cargo business has steadied, but a pickup depends on when demand from major Western economies returns, CEO Tony Tyler said Thursday.

"On the cargo side things have stopped getting worse," he said in Singapore, though he declined to predict when there will be a recovery.

"It will all depend on the economies of the US and Europe -- when they start buying."

Hong Kong's dominant carrier reported a 24 percent fall in revenue derived from passenger and cargo in the first quarter.

The International Air Transport Association (IATA) also believes the global slump in demand for air freight may have hit bottom.

IATA said air cargo demand tumbled nearly 22 percent in April, the fifth consecutive month of a drop of more than 20 percent. Demand for air cargo, a barometer for the health of global trade, has dwindled as retailers stop ordering new stock.

Tyler reiterated that, although the balance sheet of Cathay had deteriorated, it had no plans for a rights issue to raise cash.

"We don't see a problem financing plane orders," he said.

The carrier has cut capacity, asked staff to take unpaid leave, and has agreed with Boeing to delay deliveries of two 777-300ERs by a year to 2010 as it seeks to weather the downturn in demand.