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Cannix Yau

Denise Tsang

Hong Kong flag carrier Cathay Pacific Airways’ net profits shrank 15.3 per cent to HK$3.61 billion (US$460 million) in the first six months of the year against the same period in 2023 as airfares descended from abnormal heights.
Group chairman Patrick Healy said the results were strong and driven by robust demand for travel, despite the smaller profits, and revealed the company would make its first post-pandemic interim dividend payments, at 20 HK cents a share.
“The first half of 2024 was another strong period for Cathay as we maintain our focus on growing our business in a consistent and sustainable way,” he said.
He said the carrier’s passenger capacity was now at 80 per cent of pre-pandemic levels.
Healy said that the company had turned a page and embarked on a new strategy for the future in terms of scope and quality.
The company also announced a HK$100 billion investment plan, which included the purchase of more aircraft.
“Our strong performance for the first six months of the year was primarily driven by the ongoing robust demand for travel, and the solid performance of our cargo business,” Healy said.
Airfares soared amid strong demand for travel and a lower supply of seats in the early months of 2023 after Hong Kong lifted pandemic-related restrictions in January of that year.
The Cathay Group also reported on Wednesday a 13.8 per cent increase in revenue to HK$49.6 billion, compared with HK$43.6 billion in the same period of last year.
It attributed the rebound in the first half to strong passenger flight business at Cathay Pacific and its budget arm, HK Express, which between them increased 19.7 per cent to HK$33 billion, compared with HK$27.6 billion in the same period of 2o23.
Cathay also carried 10.66 million passengers in the first half of the year, a 36.4 per cent year-on-year jump from 7.8 million.
The carrier’s passenger revenue leapt 20 per cent to HK$30.01 billion in the first half year on year.
But Cathay’s staff costs rose 15 per cent to HK$6.21 billion, accounting for 15.3 per cent of operating costs. Staffing is the airline’s second-largest expense after fuel.
Cargo revenue rose 1.5 per cent, to HK$10.9 billion, compared with the first half in 2023, and the company said it expected healthy demand to continue.
But HK Express reported a HK$73 million net loss for the first half of the year, compared with a HK$333 million profit for the same period a year ago.
The group blamed the carrier’s performance on lower yields after airfares declined substantially from abnormally high levels amid strong supply in regional capacity in the market.
Another reason was the grounding of a large number of Airbus A320neo aircraft because of problems with their Pratt & Whitney engines.
But CEO Ronald Lam Siu-por said he was upbeat that the budget airline would continue to grow.
“So I think we remain committed and will continue to invest more into growing HK Express,” he said.
“And, in fact, after the pandemic, HK Express has been the growth engine for the group. At the moment, they are already at 140 per cent of pre-pandemic flights and will keep growing.”
The Cathay group has so far hired more than 3,100 pilots, and requires another 300 to meet its target of restoring full pre-pandemic capacity in the first quarter of 2025.
“The progress of our recruitment exercise so far has been satisfactory … [we will be] able to meet our target of restoring full capacity in the first quarter of next year,” he said.

On the subject of airfares, Lam said short-haul ticket prices had been normalised while those for long-haul trips had been going down by more than 20 per cent compared with last year, except for US flight prices, which remained high due to short supply.
“We are working hard to increase direct flight services to the US. In the next few months, we will fully resume the number of daily flights to three to New York, Los Angeles and San Francisco,” he said.
“We expect that prices for these long-haul flights will further go down as we gradually increase our capacity.”
The company in March reported its first annual profit in four years at HK$9.78 billion after a net loss of HK$6.62 billion in 2022, a strong post-pandemic recovery which ended a string of large deficits.
The profit was Cathay’s highest since 2010, when the figure hit HK$14 billion.
The carrier last week bought back the remaining 50 per cent of preference shares, worth about HK$9.75 billion, issued to the government as part of a bailout package over the pandemic.
The company also paid any outstanding preference share dividends up to the end of July, which brought the total payout to HK$2.44 billion.
The shares deal was part of a government-led bailout in 2020 with a HK$39 billion recapitalisation package for Cathay, as the airline struggled amid a collapse of the global travel market.
The first half of the share issue was bought back last December.


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Cathay Pacific

Hong Kong’s Cathay reports 15.3% drop in profits, reeling in HK$3.61 billion in first 6 months

Cathay says it has restored passenger capacity to 80 per cent of pre-pandemic levels so far. Photo: May Tse

Cathay carried 10.66 million passengers in the first half of the year, a 36.4 per cent year-on-year jump from 7.8 million. Photo: May Tse

Pilot sues Hong Kong’s Cathay, Haeco for alleged negligence over 2018 ‘cabin fume event’

A pilot has sued Hong Kong’s flag carrier Cathay Pacific Airways and its sister company over an alleged “fume event” in 2018. Photo: Yik Yeung-man

Hong Kong’s Cathay Pacific pushes plane orders to over 100 as part of HK$100 billion plan

Newly designed lounges will be unveiled in Hong Kong, Beijing and New York under the investment push. Photo: May Tse

Cathay will be increasing the number of cabin crew members on selected flights as part of efforts to improve its services. Photo: Eugene Lee

HK Express to launch flights between Hong Kong and Vietnam’s Phu Quoc by end of 2024

HK Express aims to operate flights between Hong Kong and Phu Quoc by the end of this year, with the carrier and Cathay already operating routes for three other destinations in Vietnam. Photo: Shutterstock

Cathay CEO Ronald Lam says the airline sees the “immense potential” in Vietnam, Laos and Cambodia. Photo: Dickson Lee

News

Hong Kong

Hong Kong economy

Group chairman Patrick Healy attributes ‘strong’ results to robust travel demand and announces first post-pandemic interim dividend payment


Group chairman Patrick Healy attributes ‘strong’ results to robust travel demand and announces first post-pandemic interim dividend payment.


Hong Kong transport

Hong Kong aviation

Hong Kong company reporting season

HK Express