Hong Kong flag carrier Cathay Pacific Airways’ net profit 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 came down from abnormally high levels.
Despite the smaller profit, group chairman Patrick Healy said the results were strong and driven by robust demand for travel, announcing the company would make its first post-pandemic interim dividend payment.
“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.
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He said the carrier’s passenger capacity had been restored to 80 per cent of pre-pandemic levels so far.
Healy said in a statement that the company was turning a page and embarking on a new strategy for the future both in terms of scope and quality.
The company announced a HK$100 billion investment plan, which included the purchase of additional planes.
“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.
Air fares soared amid strong demand for travel and a lower supply of seats in the initial months of last year after Hong Kong lifted pandemic-related restrictions in January 2023.
Cathay 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 last year.
It attributed the rebound in the first half to the strong performance of its passenger flight business, which increased to HK$33 billion, compared with HK$27.6 billion in the same period last year.
The company also carried 10.66 million passengers in the first half, a 36.4 per cent year-on-year jump from 7.8 million.
Meanwhile, cargo revenue rose 1.5 per cent, to HK$10.9 billion, compared with the first half in 2023, as the company expected healthy demand to continue.
HK Express, Cathay’s budget arm, also reported a net loss for the first half of the year to HK$73 million, compared with a HK$333 million profit a year ago.
The company attributed the loss to a high demand for short-haul flights, a decline in ticket prices alongside the increase of regional capacity in the market, and the grounding of a significant portion of the airline’s Airbus A320 aircraft due to engine issues.
Cathay needs another 500 pilots this year to meet its target of reaching 100 per cent of its pre-pandemic capacity in the first quarter of 2025. The new hires will bring the number of pilots to 3,400, which would still be below the pre-pandemic figure of 3,800.
In March, the company reported its first annual profit in four years at HK$9.78 billion after a net loss of HK$6.62 billion in 2022, which marked a strong post-pandemic recovery and 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 during the pandemic.
The company also paid any outstanding preference share dividends up to the end of July, bringing the total payout to HK$2.44 billion.
The shares were part of a government-led bailout in 2020 with a HK$39 billion recapitalisation package for Cathay, as the airline struggled financially amid a collapse of the global travel market. The first half was bought back in December last year.
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