Cathay Pacific Records 1st Profit After 3 Years Of Losses

After being one of the worst-affected airlines during the COVID-19 pandemic, Cathay Pacific has now recorded its first profit in years. The airline managed to capitalize on the growing travel demand and convert the trend into profitable figures for 2023.

$1.3 billion profit

Cathay Pacific has announced its annual results for 2023 and revealed that it made a net profit of HK$9.8 billion (US$1.3 billion). This was a relief for the carrier, which made three consecutive annual losses before this, including in 2022 for around $840 million.

The airline’s current profit came against a revenue of around $12 billion, an increase of 85%. Cathy Group Chair Patrick Healy said that the attributable profit for 2023 included a non-recurring non-cash gain of HK$1.9 billion due to a “dilution of our interest in Air China following the completion of their A-shares offering in January 2023.”

Photo: Phuong D. Nguyen | Shutterstock

The airline’s available seat kilometers (ASKs) increased by 326.8%, while traffic, measured in revenue passenger kilometers (RPKs), increased by 396.8%. However, Cathay Cargo’s revenue in 2023 decreased by 17.9% compared with 2022, mainly due to the increased passenger flight schedules providing more belly space for cargo.

Travel surge boosted numbers

The airline carried a total of 18.0 million passengers in 2023, amounting to an average of 49,300 per day – this was a whopping 541.4% more than in 2022. Last year, the load factor was 85.7% compared with 73.6% in 2022.

Cathay’s first profitable year since 2019 was due to a notable surge in travel demand following three years of pandemic-related restrictions. Healy stated that the “imbalance between supply and demand resulted in high yields and contributed to a strong financial performance in both halves of the year.”

Photo: Hafit Irawan | Shutterstock

By the end of 2023, the airline was at 70% of its pre-pandemic passenger flights, covering around 80 destinations. Ronald Lam, the airline’s Chief Executive Officer, commented,

“The significant pent-up demand for travel following three years of Covid-19 pandemic disruptions created a unique environment, in which there was a global imbalance between supply and demand that drove up yields. We expect this imbalance to diminish and yields to continue to normalise throughout 2024 as airlines around the world continue to add capacity.”

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Fleet development

The airline felt confident enough to start investing in its future fleet enhancement in a significant way. It announced an order for 32 additional Airbus A321neo and A320neo aircraft and secured the right to acquire 32 more. This complemented its existing order of 32 A321neos.

Cathay also ordered six Airbus A350F freighters and secured the right to acquire up to 20 more of these aircraft. In all, the airline ordered over 70 aircraft and purchasing rights for an additional 52 planes.

Photo: Terry K | Shutterstock

Looking ahead, the airline group, comprising Cathay Pacific and HK Express, is hopeful of reaching 80% of its pre-pandemic passenger flights within the second quarter of 2024 and is steadily working towards reaching 100% within the first quarter of 2025.

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