Cathay Pacific Airways, Hong Kong’s flagship airline, reported a marginal increase in its full-year profit for 2024, achieving a group net profit of HK$9.89 billion ($1.27 billion) for the year ending December 31. This figure reflects a modest 1% rise compared to the HK$9.8 billion recorded in 2023, surpassing analyst expectations of HK$8.49 billion as forecasted by SmartEstimate. The airline’s performance was bolstered by a combination of stronger cargo demand, higher passenger volumes, lower fuel prices, and improved cost efficiencies. However, this slight profit growth comes against a backdrop of intense regional competition, which has driven down airfares and posed challenges to the airline’s passenger yield, particularly as Asia’s aviation sector continues to recover from the pandemic-induced downturn.
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The airline’s revenue for the year rose by 10.5% to HK$104.37 billion, aligning closely with the Visible Alpha consensus estimate of HK$104.74 billion. This marked the first time since 2019 that Cathay Pacific’s annual revenue exceeded HK$100 billion, a milestone highlighted by Chief Financial Officer Rebecca Sharpe during a briefing. A significant portion of the profit included a one-off gain of HK$578 million from the dilution of its stakes in Air China and Air China Cargo, which provided a financial cushion. Additionally, the company declared a second interim dividend of HK$0.49 per ordinary share, exceeding the Visible Alpha consensus of HK$0.42, signaling confidence in its financial stability despite the competitive pressures.
Despite these gains, Cathay Pacific faced notable headwinds. The airline’s full-service passenger operations saw a 12% decline in annual yield—a key measure of airfare profitability—while its wholly owned low-cost carrier, HK Express, experienced a steeper 23% drop. This reduction in yields reflects the intense price competition on regional routes as airlines across Asia restore capacity post-pandemic. Regional airfares have largely normalized, but Sharpe noted that long-haul ticket prices still have room to decline further as supply continues to increase. HK Express, despite being rated the fastest-growing airline of 2024 by aviation consultancy OAG, swung to a HK$400 million loss from a HK$433 million profit the previous year. The carrier’s struggles were compounded by operational challenges, including the grounding of some Airbus A320neo aircraft due to industry-wide issues with Pratt & Whitney engines in 2024.
On the cargo front, Cathay Pacific, based at the world’s busiest cargo airport in Hong Kong, saw a 3% rise in yields and an 11% increase in tonnage carried, driven by robust e-commerce demand from China. However, the airline cautioned that emerging global trade conflicts could threaten this segment, which has been a reliable revenue source in recent years. Chief Executive Ronald Lam emphasized the uncertainty in the cargo outlook, noting that geopolitical tensions require close monitoring. Looking ahead, Cathay Pacific is investing heavily in its future, committing HK$100 billion over the next seven years, primarily for new aircraft. This follows a rebuilding phase in 2023-2024, during which the airline will focus on rehiring staff and restoring operations. The first deliveries of Boeing’s long-delayed 777X widebody jets are now expected in early 2027, coinciding with Hong Kong International Airport’s expansion to a three-runway system, which began in November 2024. Despite the competitive landscape, Cathay remains optimistic, with plans to expand its workforce by up to 4,000 employees, bringing its total to around 34,000 by year-end. This strategic focus on growth and efficiency aims to position the airline for sustained profitability, even as it navigates a challenging regional market.