Cathay Pacific Profits Soar Past Pre-Pandemic Levels |

If one airline was hit hard by the pandemic, it must have been Cathay Pacific. Looking at the 2025 results, there is not a trace of this period left, with the airline group reporting a consolidated operating profit of HK$14.5 billion. Compare this to 2019, long the industry's reference year, when Cathay Pacific posted an HK$3.4 billion operating profit. The net profit compares HK$10.8 billion versus HK$1.7 billion. Actually, 2018 was a better year for Cathay, with an operating profit of HK$3.6 billion and a net profit of HK$2.8 billion. When COVID-19 first hit China and then spread to the rest of the world, all airlines reduced or even completely closed their passenger networks. But while some regions reopened later in 2020, before a second wave hit in early 2021, Hong Kong and China remained restricted on air travel well into 2022. Cathay’s fleet was parked in Hong Kong and Australia, its future dependent on a lifeline from the government. Hong Kong and the Greater Bay Area were among the last regions to fully emerge from the pandemic. Only since 2022 has Cathay Pacific been able to rebuild its network. Chair Patrick Healy said on March 11 in the earnings release that his airline group has seen three consecutive years of solid profits. Indeed, operating and net profits look like this: in 2023, HK$15.1 billion/HK$9.8 billion; in 2024, HK$13.9 billion/HK$9.9 billion; and in 2025, HK$14.5 billion/HK$10.8 billion. The operating margin soared from 2.1 per cent in 2018 to 10.4 per cent in 2023, then fell slightly to 9.3 per cent last year. Shareholders will benefit from an interim dividend of HK$0.84 per ordinary share. Revenues grew from HK$94.5 billion in 2023 to HK$104.4 billion last year, and to HK$116.7 billion last year. The biggest growth has been in passenger revenues, which rose from HK$61.4 billion in 2023, with 22.1 million passengers carried by Cathay and HK Express, to HK$78.8 billion in 2024, with 36.8 million passengers. Expenses rose to HK$102.7 billion from HK$91.1 billion in 2024, mainly due to increased flying activity. Available seat kilometres (ASK) increased by 25.8 percent, while traffic/revenue passenger kilometres (RPK) were up by 28.9 percent. Most capacity in ASKs was deployed to the Americas, but the biggest year-over-year growth went to capacity in South Asia, the Middle East, and Africa. The highest load factor (89.2 percent) was reported on the network to Europe. Interestingly, the fleet didn’t grow that much over these years. In 2023, Cathay operated 181 aircraft and HK Express 33, including freighters. Last year, this was 179 and 44, respectively. More destinations CEO Ronald Lam said that Cathay has added more destinations to the network over the past three years. “Having fully rebuilt our flights earlier in 2025, we launched services to 20 destinations last year as a Group, bringing our passenger network to more than 100 destinations worldwide. Our team also continued to grow, reaching more than 33,000 people by the end of 2025.” More frequencies were added to the existing network, like daily services to both Riyadh and Dallas. Seattle will go live on March 30. Cathay Pacific Cargo, which was instrumental in pulling the airline through the pandemic, generated HK$24.3 billion in revenues, only HK$0.3 billion more than in 2024 in a volatile market. Available freight tonne kilometres (AFTK) increased by 8.3 percent, predominantly as more belly space became available on the extended passenger network. Total tonnage carried grew by 9.5 percent to 1.7 million tonnes. While low-cost subsidiary HK Express grew its revenues by 6.7 percent to HK$6.4 billion and carried 7.9 million passengers, it was the only airline in the group to produce a pre-tax loss. The HK$996 million loss is blamed on short-term factors, including “changes in customer preferences for travel destinations, launching multiple new routes that will take time to mature, and some of its aircraft remaining grounded due to industry-wide Pratt & Whitney engine issues that continued without improvement.” Solid position Yet, Cathay Pacific is in a very solid financial position. After further restructuring of the balance sheet, the group has HK$25.4 billion in unrestricted liquidity. The net debt-to-equity ratio is down to 0.98 from 1.10 in 2024 and 1.31 in 2019. The group bought back preference shares, warrants, convertible bonds, and recently, the 9.99 percent that Qatar Airways held. It has perfectly positioned Cathay for the next phase in its history, which includes a HK$100 billion investment in new aircraft, cabin retrofits, new airport lounges, and new digital products. Cathay has 79 passenger aircraft on order, including 30 Airbus A330-900s for delivery after 2028, and 35 Boeing 777-9s. It placed a follow-on order for 14 in August last year and expects the first aircraft to enter service in 2027, including a new First Class product. The backlog also includes six Airbus A350Fs (the first is due in 2027) and another 14 Airbus A321neos. The 16 in-service A321neos will get a slight cabin update, Lam said: “We have also listened to our customers’ feedback and will be enhancing our existing offerings. Onboard our narrowbody Airbus A321neo aircraft, we will be reducing the number of seats in the Economy cabins, providing each seat with additional space and reinforcing our commitment to delivering the most comfortable and enjoyable experience for our customers.” The regional fleet of A330-300 will get a new Aria flat-bed Business Class and new Economy Class as a retrofit by the end of this year HK Express has eight A320neos and ten A321neos on order for delivery this year and the next two years. Freighter airline Air Hong Kong has no new aircraft coming up and will keep its fleet at 14 A330s. In the year Cathay celebrates its 80th anniversary, it is once again confronted with new uncertainties. This time, it is the conflict over Iran and rising fuel costs that are affecting the entire industry. As Patrick Healy says, “The prevailing global geopolitical environment is volatile, causing unexpected shifts in passenger and cargo traffic flows as well as jet fuel prices. Ongoing supply chain disruption and cost inflation continue to impact the delivery of new aircraft, cabin products, and parts.” “However, we have built a strong foundation that has made Cathay resilient, efficient, and adaptable. This has put us in the best possible position to withstand current market turbulence, and we will remain agile as we continue to face external challenges. We expect to grow passenger capacity by around 10 percent in 2026 as we add frequencies and destinations to our network, which will also increase cargo capacity. We remain highly confident in our future at the very centre of the Hong Kong international aviation hub.”

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