Cathay Pacific Airways has reported a net profit of HK$4.26 billion for the first half of 2023 reflecting a strong rebound from the HK$5 billion loss reported in H1 of 2022.
The airline grappled with losses amounting to HK$33.7 billion over three years during the pandemic due to tough travel restrictions that grounded much of its fleet and forced the lay-off of thousands of employees as part of cost-cutting measures.
As Hong Kong reopened its borders at the end of last year, Cathay has gradually increased flights amid strong travel demand.
“The first half of 2023 has been a positive period for the Cathay Group, as we worked to rebuild connectivity at the Hong Kong international aviation hub following the full reopening of borders in Hong Kong and in the Chinese Mainland,” commented Patrick Healy, chairman, Cathay Group. “As Hong Kong’s home carrier, our focus has been on adding more flights and more destinations to cater to the growing demand for travel, and we have been making good progress in these efforts.”
Healy added Cathay planned to buy back 50% of the preference shares the government acquired in 2020 as part of a recapitalisation package at a redemption price of more than HK$9.75 billion before the end of the year. “The rest would be bought back by the end of July next year noting the move was subject to the completion of the proposed capital reduction and its business conditions at the relevant time”, Healy further noted.
In June, Cathay paid the government HK$1.5 billion in deferred dividend payments owed on HK$19.5 billion in preference shares acquired as part of the recapitalisation package. The company earlier intended to pay all future dividends as they fell due and, subject to market conditions, buy back the preference shares over the next 12 months.
It also reported a 135% increase in revenue to HK$43.5 billion, compared with HK$18.5 billion in the same period last year.
As of June 30, 2023 the Group reported unrestricted liquidity balance of HK$28.9 billion.
Cathay attributed the rebound in the first half to strong passenger flight business, which increased to HK$27.5 billion compared with HK$2.08 billion in the same period last year. The airline carried 7.8 million passengers in the first half, up 2,200% compared with the same period last year.
Meanwhile, Cathay’s cargo revenue fell 10%, to HK$12.4 billion, compared with the first half in 2022, citing weaker global market for air cargo.
HK Express, carried 1.54 million passengers in June, a 931.9% increase from the year before and reported a profit of HK$333 million for the first half of 2023 as compared to loss of HK$824 million in H1 of 2022. The airline benefitted from robust travel demand, especially for short-haul destinations in Asia, and in April it returned to pre-pandemic flight frequencies levels with more than 420 flights per week.
In the first half of 2023, Cathay Pacific’s passenger revenue increased by 1,109.5% to HK$25,013 million compared with the same period in 2022.
Passenger flight capacity, measured in available seat kilometres (ASKs), increased by 1,111.3%, while traffic, measured in revenue passenger kilometres (RPKs), increased by 1,685.0%. The airline carried a total of 7.8 million passengers in the first half of 2023, an average of 43,184 per day, which was 2,233.1% more than in the first half of 2022.
Going ahead, Cathay’s primary focus is building back connectivity at the Hong Kong international aviation hub. So far, the airline claims to be on track to achieve its target of 70% pre-pandemic passenger flight capacity levels covering 80 destinations by the end of 2023 and aims to reach 100% by the end of 2024.