Cathay Pacific Airways reported a 1% increase in first‑half net profit to HK$3.65 billion (about US$465 million), driven by higher passenger volumes, lower fuel costs, and steady cargo operations. Passenger traffic rose sharply, with average daily passengers reaching about 75,300, a 28% rise year-on-year, with load factor climbing to 84.8% from 82.4% in the prior period. Passenger revenue rose 14% to HK$34.21 billion, though yields declined by 12.3% as capacity expanded across the region.
Cargo revenue grew modestly by 2.2% to HK$11.14 billion, with total tonnage up 11.4%. Yet cargo yields slipped by 3.4%, reflecting challenges tied to recent changes in U.S. tariff policy and the removal of duty-free status on low-value shipments from China and Hong Kong. Cathay noted that cargo resilience was aided by redeploying capacity to stronger markets amid uncertain conditions.
HK Express, the group’s low-cost carrier, recorded a first-half loss of HK$524 million, reversing its profit from the same period last year. Despite passenger growth of about 33.5%, yields plunged by 21.6% and load factor fell to 78.9%. Management acknowledged near-term turbulence but emphasized a long-term path to profitability for the low-cost arm.
In a strategic move, Cathay exercised options to order 14 additional Boeing 777‑9 aircraft, bringing its total firm commitments for this next-generation widebody to 35, with options for seven more. The plane order, valued at roughly US$8.1 billion at list prices, was secured at significant discounts. Deliveries are expected to begin in 2027, extending through 2034.
Investor reaction was harsh: shares plunged as much as 10.7% on the day following the earnings release, marking the steepest single-day drop since November 2008. In contrast, the Hang Seng Index experienced a modest uptick.
On the plus side, Cathay declared an interim dividend of HK$0.20 per share, signaling confidence in its financial position despite modest earnings growth and mounting margin pressure.
Summary:
- Net profit up 1%; passenger traffic strong, yields down 12.3%
- Cargo revenue rose 2.2%; yields declined amid tariff changes
- HK Express posted HK$524M loss despite 33.5% passenger growth
- 14 Boeing 777-9 jets added; total firm order now 35
- Shares dropped 10.7%; HK$0.20 dividend declared
Despite its soft earnings beat, Cathay Pacific remains focused on long-term recovery, modernizing its fleet, strengthening cargo deployment, and investing in repositioning HK Express for future growth.
