(March 11): Cathay Pacific Airways Ltd shares climbed after the airline posted its biggest profit since 2010 and said passenger capacity will increase 10%, painting a bullish picture for growth even as the Middle East conflict roils the global aviation sector.
Hong Kong’s de-facto flag carrier said net income climbed almost 10% to HK$10.8 billion (US$1.4 billion or $1.75 billion) last year, beating analyst estimates. Revenue surged 12% to a record HK$116.8 billion, also topping estimates.
Cathay gave a positive view for the year ahead, expecting to increase passenger capacity by around 10% as it adds more frequent flights and destinations to its network. As part of its growth plan, the airline said it will take delivery of eight Airbus SE single-aisle jets.
Shares rose more than 5% in Hong Kong following the release of its results and are up about 5% this year.
The carrier’s optimistic outlook contrasts with the turbulent mood hanging over the industry as war in the Middle East upends operations and sends energy prices surging. Some carriers are increasing their fuel surcharges or raising fares outright, with some Asian airlines mapping out contingency plans including grounding planes should the conflict persist.
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“We have built a strong foundation which has made Cathay resilient, efficient and adaptable,” outgoing chairman Pat Healy said, noting volatility in air traffic flows and jet fuel prices. “This has put us in the best possible position to withstand current market turbulence.”
The company hedges roughly 30% of its near-term fuel needs. It also already imposes surcharges across its network, which as of March 1 included HK$569 — or double for a round-trip — between Hong Kong and New York JFK. Hometown rival Hong Kong Airlines said Tuesday it’s increasing surcharges.
Cathay is likely to stand out from the aviation disruptions given its strong balance sheet, fuel hedging and network flexibility, JPMorgan wrote in a note.
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The airline issued a second interim dividend of 64 Hong Kong cents a share, and will pay HK$5.2 billion in ordinary share dividends for the 2025 earnings period. Meanwhile, losses at budget unit HK Express widened to HK$996 million.
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