Cathay Pacific expects up to HK$4.5 billion first-half profit as demand rebounds

HONG Kong’s Cathay Pacific Airways said on Friday (Jul 14) it expects to record a profit of up to HK$4.5 billion (S$759.47 million) in the first half of the year, as travel demand skyrockets on border reopenings.

Cathay Pacific took in record losses for the last three years as it parked much of its fleet during the pandemic amid Covid-related flight cancellations and drastic headcount cuts.

That is turning around as passengers flock in huge numbers to travel overseas, with Cathay Pacific carrying a total of about 7.8 million passengers in the first half of the year, compared with a paltry figure of 335,462 last year.

“Our long-haul routes popular for student traffic, such as North America, the UK and Australasia, all saw good demand,” the 76-year-old airline said.

As a result, its passenger load factor was 87.2 per cent for the first-half, compared with 59.2 per cent last year.

Cathay said it would offer a “special appreciation award” of up to six weeks of eligible pay to employees who had been with the airline through the pandemic.

The Hong Kong Aircrew Officers Association (HKAOA), which represents some Cathay pilots, said that while the reward was welcome, it was a “drop in the ocean compared to the long-term cuts that Cathay Pacific has imposed on pilots and cabin crew”.

Cathay Pacific’s shares rose as much as 6.3 per cent to their highest in nearly seven months, beating a 0.3 per cent gain for the benchmark Hong Kong index.

Airlines around the world are benefiting from a rebound in travel which has far exceeded their expectations, prompting carriers to scale up their fleet, improve flight frequencies, and add new destinations.

SEE ALSO

Hong Kong aviation recovery is coming much sooner than expected

Hong Kong to reopen Cathay’s in-town airport check-in Wednesday

“Turning to July and August, on the travel side the outlook is encouraging,” Cathay Pacific said.

While cargo demand was expected to remain flat during the summer period, the carrier is preparing for demand to pick up in the latter part of the third quarter, it added.

Hong Kong’s flagship carrier expects first-half consolidated profit attributable to shareholders of between HK$4 billion and HK$4.5 billion, including a one-off gain from the near 1.9 per cent stake sale in Air China.

It lost HK$5 billion a year ago.

For FY2023, Cathay Pacific is expected to log profit of HK$3.9 billion, according to a Refinitiv estimate, a huge swing from a HK$7.2 billion loss last year. REUTERS