Did You Say Cathay Pacific?

And that was supposed to put some perspective into the hedging mess at MK. Bad move. That's because unrealised losses of Air Mauritius through 2010 are estimated at Rs5.47 billion (EUR 129.5m) or some 64.4% of its shareholders' equity of Rs 8.49 billion (EUR 201m) whereas the paper losses for Cathay Pacific are Rs31.66 billion (USD 980m) on shareholders' funds of a little less than Rs213 billion. In other words the paper loss for Cathay barely represents 15% of its equity.

More importantly, these unrealised losses can be easily met by the strong balance sheet of the Hong-Kong-based airline which at Dec 31, 2007 stood at close to half a trillion rupees. No, they won't be seeking support from the authorities.

You may also wish to know that Cathay had 159 planes vs. 12 for MK and that it transported over 23 million people in 2007 compared to the 1.3 million for Air Mauritius. Finally its depressed market capitalisation was close to Rs150 billion a couple of weeks ago or about 300 times that of MK's.