Editorial | Cathay result gives hope that business is on path to recovery

For the first time in three years, Hong Kong’s flagship airline has reported a net profit, a result that has given a lift to hopes the business environment is rising clear of pandemic clouds. With many challenges ahead, it is important that the carrier and community remain focused to avoid stalling the path to recovery.

The net profit figure reported on Wednesday by Cathay Pacific Airways stood at HK$4.26 billion (US$546 million) for the first half of 2023. The figure included a one-off gain of HK$1.9 billion from Cathay’s dilution of its interest in Air China shares from 18.13 per cent to 16.26 per cent.

It is an impressive turnaround from the same period last year, when Cathay racked up HK$4.99 billion in losses amid the city’s stringent travel curbs.

It was also a steep climb from the HK$33.7 billion in losses racked up over three years of pandemic woe, when much of its fleet was grounded and thousands of workers were laid off.

Cathay has gradually increased flights since late last year in response to a surge in demand after Hong Kong joined the rest of the world rolling back travel curbs. The carrier said it now plans to buy back company shares acquired by the government as part of a HK$39 billion recapitalisation package. Cathay also plans to purchase up to 32 Airbus aircraft.

Passenger flight capacity for Cathay and its budget arm HK Express is still only 60 per cent of pre-pandemic levels, but Cathay Pacific Group chairman Patrick Healy said the company is on track to hit 70 per cent by the end of this year and full restoration 12 months later.