HONG KONG: Hong Kong carrier Cathay Pacific on Wednesday reported its first annual net profit in four years, citing a surge in demand as it emerges from the impact of the city’s Covid isolation.
While airlines around the world have struggled to reclaim pre-pandemic capacity, Cathay’s top executives acknowledged their rebound faced a prolonged trajectory.
The financial hub, which had one world’s busiest and best-connected airports, was one of the last cities to ditch strict travel restrictions and quarantine requirements.
“In 2023, we finally left the Covid-19 pandemic behind us,” Cathay chair Patrick Healy said in a results announcement, adding that it was “our first profitable year since 2019”.
He later added that “Hong Kong opened up so much later than other global hubs”.
CEO Ronald Lam thanked stakeholders, adding: “Cathay is back!”
Cathay said profit surged to $1.25 billion last year, compared with a loss of $847 million in 2022, after hitting its target of operating at 70 percent of pre-pandemic passenger flights.
It carried 18 million passengers in the 12 months, up from 2.8 million in 2022.
Cathay also posted an operating profit of $1.9 billion in 2023, the highest on record, according to Bloomberg News, and announced its first dividend payment since 2019, at $0.43 Hong Kong dollars per ordinary share.
The firm’s share price in Hong Kong ended the day up 5.8 percent.
Total revenue surged 85 percent to $12 billion, though cargo revenue fell 16.2 percent to $3.3 billion.
Asked about the scandal-hit aircraft manufacturer Boeing, Cathay’s chief operations and service delivery officer Alex McGowan said the airline’s 777-9 order is due for delivery in late 2025.
“We’ve got full confidence that Boeing are going to resolve their current issues and work on delivering that on time to us,” McGowan said at a press conference.
“We’ve worked very closely... with Boeing for many years. We’re working with them on our existing fleet, the 777-300ER,” he added.
Cathay had earlier vowed to return to 100 percent pre-pandemic passenger flight levels by the end of 2024, but on Wednesday pushed back the target by up to three months.
CEO Lam said that the delay was “mostly a manpower issue” and insisted Cathay was “no slower than our global peers” in rebuilding capacity.
The company said it was working to address the effects of “truly significant” challenges facing the aviation industry, in areas including “recruitment, training and supply chain shortages”.
It added that it planned to expand its workforce this year by around 20 percent, or 5,000 people.
Staff attrition rates have normalised after spiking during the pandemic, Lam told reporters.
Cathay saw a spate of flight cancellations during the Christmas and New Year holidays, which the company attributed to underestimating the pilot levels needed during the seasonal flu peak in Hong Kong.
“This incident has negatively impacted our brand reputation and the confidence that Hong Kong people and our customers have in Cathay,” Lam said in an internal memo at the time.
In January, Cathay said it had signed up 100 cabin crew via its first recruitment drive in mainland China.
Comments
Comments are closed.