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After a prolonged period of weakness, cargo demand started to improve in the summer of 2014  and was very strong in the fourth quarter. The Group’s cargo revenue in 2014 increased by 7.3% to HK$25,400 million compared to the previous year. Over-capacity in the air cargo market put downward pressure on rates in the first half of the year. Yield for the full year for Cathay Pacific and Dragonair decreased by 5.6% to HK$2.19, despite improved cargo demand in the second half. Capacity increased by 10.4%. The load factor increased by 2.5 percentage points to 64.3%. Capacity was managed in line with demand in the first half of 2014 but an almost full freighter schedule was operated for most of the second half. The new Cathay Pacific cargo terminal worked effectively in its first full year of operation and made the Group’s cargo operations more efficient.

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