Hong Kong’s Cathay Pacific Group, which owns the city’s flagship carrier Cathay Pacific, low-cost carrier Hong Kong Express and cargo airline Air Hong Kong, has recorded a profit of HK$3.61 billion for the first half of 2024, a 15 per cent drop compared to the same period last year. Speaking during a press conference to announce the group’s interim report on Wednesday, Patrick Healy, chair of the group, said the fall in profit was “principally attributable to the normalisation of ticket prices.
” In the first half of 2024, Cathay Pacific carried a total of 10.7 million passengers, with passenger revenue increasing by 20 per cent compared to the first half of 2023, a period during which Covid-19 related travel restrictions were lifted. Cathay’s airfares dropped 11 per cent in the first six months of the year compared to the same period of 2023.
However, ticket prices remained 25 per cent higher when compared with January to June in 2019. As operating expenses significantly increased, the airline’s first-half year profit after taxation and before exceptional items saw a 15.5 per cent decrease compared to 2023.
Budget airline Hong Kong Express reported a loss of HK$73 million for the first half of 2024. Healy said the airline had been affected by falling airfares and an “increase of regional capacity in the market.” Besides, the airline’s Airbus A320neo aircraft had to be grounded due to engine issues.
“To improve its financial performance, the airline is expanding its network to cater to a more diverse customer base, adding more fuel-efficient aircraft, boosting aircraft utilisation and improving operational efficiency,” Healy said in the interim report. Separately, Air Hong Kong, a subsidiary of the group, recorded a profit of HK$411 million, a slight increase from the same period in 2023. On Wednesday, the group also announced it would invest HK$100 billion over the next seven years in its fleet, cabin products, lounges, and digital and sustainability leadership to “strengthen Hong Kong’s international aviation hub status riding on the Three-Runway System.
” The Hong Kong government said earlier this year that the airport’s third runway project would be completed by the end of 2024. “As the city’s home airline, we are a key contributor to the future success of Hong Kong,” Healy said. “Our substantial investments further demonstrate our unwavering commitment to Hong Kong’s ongoing economic development as we look ahead to the ample opportunities presented by the Three-Runway System.
” Cathay Pacific has vowed to achieve a rapid recovery since the city lifted all Covid-19 restrictions early last year, setting a target of restoring 100 per cent of its pre-pandemic passenger flight capacity by the end of this year. The group lost a total of HK$34 billion over the past three years, Cathay told HKFP in 2023. In 2020, the government gave the airline a HK$39 billion bailout package .
In August 2023, it announced it had recorded a half-year profit of HK$4.3 billion . its first since the Covid-19 pandemic.
In March, the group reported its first annual profit since 2019 . By July 31, the group had has bought back all of the HK$19.5 billion shares held by the government as part of its bailout package.
However, Cathay Pacific’s passenger capacity has been slower to recover, with available seat kilometres, a term measuring capacity, increasing 42.7 per cent in the first half of 2024 compared to the same period in 2023. Cathay pilot union the Hong Kong Aircrew Officers Association has repeatedly warned that the airlines’ recovery would be constrained by a shortage of aircrew .
On Tuesday, union chair Paul Weatherilt said in statement that the group’s recovery “has been stalled for months.” “There are structural reasons [for the stalled recovery]..
. CX has completed the easy part of the recovery: reactivating the pilots that remained,” Weatherilt said, referring to the airline by its code. “Now CX must recruit and train from scratch – which takes more time.
We think CX is still short of 1,000 pilots.” On Wednesday, the group did not mention how many pilots it employed or was training. Healy said Cathay’s recruitment and training “is on track,” and that the group’s total headcount would rise by 5,000 this year to a total of 29,000.
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