First Cathay profit since 2019 as travel demand boosts earnings

The airline reported an attributable profit of HK$9.23 billion (US$1.18 billion) in 2023, a significant turnaround from the restated attributable loss of HK$330 million in the previous year.

Cathay Pacific also announced an interim dividend of 43 Hong Kong cents per ordinary share, the first dividend payment to ordinary shareholders since 2019.

The Cathay Group as a whole registered an attributable profit of HK$9.79 billion in 2023, compared with the restated attributable loss of HK$6.62 billion in 2022.

“Our priority in 2024 is to ensure high-quality and sustainable growth as we prepare for the full operation of the Three-Runway System at Hong Kong International Airport by the end of this year,” Cathay Pacific Chairman Patrick Healy said in a corporate statement.

The three-runway system will boost the airport’s capacity to 120 million passengers and more than 10 million metric tons of cargo per year by 2035.

Cathay Pacific CEO Ronald Lam Siu-por added that the airline aims to gradually restore its flight operations, working toward reaching 80 % of pre-pandemic flights within the second quarter of this year, and 100 % within the second quarter of next year, which is three months later than the previous projection.

The carrier plans to expand its workforce by employing 5,000 more people this year than it did in 2023.

Figures from the Hong Kong Immigration Department show that the number of tourists visiting Hong Kong was still steadily increasing, with about 7.83 million recorded in the first two months of 2024, which means an average of around 130,000 tourists per day. This represented a 12 % increase compared to the fourth quarter of last year.

In terms of the cargo segment, the airline group expects trade flow directional imbalances to persist, which will affect overall load factors. Yields from the cargo segment will decrease this year because of the normalization of the air cargo industry but are expected to remain above 2019 levels.

During the IATA World Cargo Symposium held in Hong Kong on Tuesday, Financial Secretary Paul Chan Mo-po said Hong Kong’s airport will likely retain its position as the world’s busiest cargo airport.

Hong Kong International Airport handled around 4.3 million tons of cargo in 2023. It has also seen significant developments such as the expansion of DHL’s Central Asia hub and the completion of the Cainiao Smart Gateway, along with UPS’ plans to develop a new hub facility at the airport.

The airline said it will buy back the remaining 50 % of the HK$19.5 billion preference shares owned by the Hong Kong Special Administrative Region government by the end of July, subject to market conditions and the company’s business operations at that time.

Following the result announcement, Cathay Pacific’s share price jumped more than 5.7 % to close at HK$9.18 per share on Wednesday.

Oswald Chan

China Daily

Asia News Network