Cathay Rises Above Financial Turbulence: An International Edition Exclusive

The airline reports its second successive yearly profit of approximately HK$10 billion, clears off the debt accumulated during the government bailout, and acquires additional airplanes.

Not so long ago Cathay Pacific Airways was still climbing out of a dark financial cloud that enveloped it during the Covid years. This week the airline reported its second consecutive annual profit of nearly HK$10 billion, compared with a loss of HK$6 billion-plus in 2022. As a result Cathay has been able to buy back shares, warrants and bonds issued in a government-led bailout of unsustainable debt arising from the pandemic, and set about consolidating its claim to be rated one of the world's top airlines.

Last year, net profit increased by just 1 percent to reach HK$9.9 billion due to decreased fares from unusually high levels previously observed. Despite challenges such as fierce post-pandemic competition and geopolitical tensions, this result demonstrated a strong showing fueled by an uptick in both cargo and passenger volumes, reduced costs of fuel, and improved efficiency measures. The cargo sector was particularly prominent thanks to the expansion of e-commerce activities. In case escalating trade disputes cast doubt over the stability of the shipping industry, maintaining operational adaptability will become crucial.

"We remain dedicated to shaping the future as we continue contributing to enhancing Hong Kong’s position as a premier global aviation center," stated Cathay Group Chairman Patrick Healy.

Are you looking for insights into the most significant issues and developments globally? Find your answers here. SCMP Knowledge Our latest platform features handpicked content including explainers, FAQs, analyses, and infographics, all provided by our acclaimed team.

This reversal has emboldened the group to acquire an additional 30 Airbus planes atop the initial order of 70 jets, contributing to aHK$100 billion expansion initiative spanning seven years. This brings their overall tally to 150 airplanes, including potential purchases.

Maintaining the status of an aviation hub is something the government must uphold according to the Basic Law. The investment of HK$141 billion for constructing a third runway underscores this commitment. Given their roles as the city’s flagship carrier and low-cost airline respectively, both Cathay and Hong Kong Express hold crucial positions in achieving this objective.

Cathay can make its most significant impact by expanding both its passenger and freight operations, enhancing internal resilience, and preparing robust contingency strategies. The aim should be to prevent dependence on government support during future crises, thereby demonstrating its capability to meet growing industry standards. Notably, despite returning to pre-pandemic operational levels, the airline hasn’t resumed all former flight paths yet. When it reinstates these services, maintaining high-quality customer experiences may pose challenges. Successfully addressing these concerns will be crucial for establishing itself as one of the premier carriers globally.