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Cathay Pacific profit soars 71% amid Iran war and passenger surcharges
🇭🇰 Hong Kong /Economy & Trade

Cathay Pacific profit soars 71% amid Iran war and passenger surcharges

From Hong Kong Free Press · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

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  • Cathay Pacific reported a 71% surge in first-half net profit to HK$6.2 billion, driven by strong passenger demand and cargo.
  • The airline benefited from travelers avoiding the Middle East, which offset a near doubling of fuel costs due to the Iran war.
  • Cathay Pacific remains cautiously optimistic for the rest of the year, planning to add 150 new aircraft over the next decade.

Cathay Pacific's net profit soared 71% to HK$6.2 billion in the first half of the year, fueled by robust passenger and cargo demand. The Hong Kong-based airline announced Wednesday that its earnings were positively impacted by ongoing demand for its services and its low-cost subsidiary, HK Express. Stronger contributions from associates also bolstered the results.

Our result was positively impacted by ongoing underlying demand for Cathay Pacific and Cathay Cargo, improved performance from HK Express, and stronger contributions from associates.

— Guy BradleyThe chair of Cathay Pacific stated this in the airline's earnings report, explaining the factors behind the profit surge.

Passenger revenue climbed 26.3% to HK$43.2 billion. This growth was amplified by increased transit traffic through Hong Kong, as travelers sought alternative routes to avoid the Middle East situation in the second quarter. The airline noted that its European performance, in particular, benefited from these shifted traffic flows.

Despite the positive financial performance, the airline faced significant challenges, notably a near doubling of fuel costs. Jet fuel prices nearly doubled from the first to the second quarter due to the Iran war, prompting Cathay Pacific to adjust fuel surcharges multiple times. Fuel costs increased by 59.1% compared to the same period in the previous year.

Having got off to a strong start in the first quarter, we faced a more challenging second quarter due to the situation in the Middle East and the resulting significant increase in jet fuel prices.

— Guy BradleyThe chair described the challenges faced in the second quarter, specifically mentioning the impact of the Middle East situation and rising fuel prices.

Looking ahead, Cathay Pacific expresses cautious optimism for the remainder of the year. The company is on track to meet its passenger capacity growth target of around 10% for the group. However, it remains vigilant about the continued impact of elevated fuel prices and the evolving geopolitical and market landscape. The airline also plans to expand its fleet, aiming to add 150 new aircraft to its current 235 within the next decade, contingent on favorable market conditions.

We expect the impact of elevated fuel prices will continue for the rest of the year and we remain alert to the changing geopolitical and market situation.

— Cathay PacificThe airline expressed its outlook for the remainder of the year, highlighting ongoing concerns about fuel prices and market volatility.
DistantNews Editorial

Originally published by Hong Kong Free Press in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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