From Cathay Pacific to Orbitz, there seems to be signs the worst may be over but no one's bringing out the champagne yet, especially not Singapore Airlines.

In a desert, a thirsty man grabs water wherever he can find it. Sometimes he sees mirages. And it's hard to know whether the "green shoots" being spotted and being reported on in the travel industry are mere mirages or real oases.

But it's good news, nevertheless, and we must celebrate good news when we find it these days.

This week's news of Cathay Pacific flying back into the black raised a few eyebrows and definitely raised hopes, albeit the return to profit was made on the back of fuel-hedging gains which offset declines in passenger and cargo demand.

The airline's net earnings for the six months ended June 30 leaped 207 percent to HK$812 million, compared with a loss of HK$760 million in a year earlier.

Cathay Pacific ended its two straight losses in the first half of 2009, after booking an unrealised mark-to-market gain of HK$2.1 billion from the fuel hedging contracts.

The fall in fuel prices in the second half of 2008 led to a HK$7.6 billion fuel-hedging paper loss last year. Without the fuel-hedging gains, the airline would have booked a net loss of HK$3.47 billion in the first half.

The airline is not celebrating overly though.

Chairman Christopher Pratt said that the global aviation industry is having to confront "one of the most severe demand downturns in living memory".

"There is still no sign of early recovery," Pratt said. "The best we can say at the moment is the worst may now be over."

Pratt added that the fall in demand may have bottomed out, but there is no indication of when a sustained pick-up will begin. "What we're having trouble reading, not surprisingly, is the extent to which premium traffic will return to our business model and at what price. Many of the equities markets are discounting a strong recovery, but we can only say in our business, we're not seeing that."

Also beating expectations is online travel agency Orbitz WorldWide, which posted a second-quarter profit, helped by increased booking transactions and cost-cutting that offset declines in demand.

Chief Executive Barney Harford also believes the worst declines in demand are in the past. "What we're seeing is a stabilisation in terms of demand. We're seeing a stabilisation in terms of average daily rates on hotels. But I don't think we're seeing any major signs of any kind of uptick."

Orbitz said its net profit was US$10 million, or 12 cents per share, compared with a year-earlier loss of US$5 million, or 6 cents per share. Orbitz, which owns major travel sites Orbitz.com and Cheaptickets.com, said the total value of its bookings fell 12 percent on lower air fares and lower average hotel rates.

Domestic bookings values decreased 9 percent, while international bookings values fell 27 percent. Revenue dropped 19 percent to US$188 million due to the removal of most air booking fees and a decline in average hotel room rates globally, Orbitz said.

The company said operating expenses declined to US$166 million from US$216 million.

Singapore Airlines is not sharing the same fortunes however. It warned it could make a full-year loss for the first time since it was founded in 1972, as it reported its first quarterly deficit since the Sars crisis in 2003.

Singapore Airlines reported a net loss of S$307m ($213m) in the April-June period against a profit of S$359m a year ago. Revenues fell 30 per cent to S$2.87bn. Fuel hedging losses amounted to S$287m.

So is the worst over? Not quite yet, we reckon, but as someone says, "If there is no light at the end of the tunnel, light it yourself."

Yeoh Siew Hoon, one of Asia's most respected travel editors and commentators, writes a regular column on news, trends and issues in the hospitality industry for 4Hoteliers.com.

Siew Hoon, who has covered the tourism industry in Asia/Pacific for the past 20 years, runs SHY Ventures Pte Ltd. Her other writings can be found at www.thetransitcafe.com

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