CATHAY PACIFIC REPORTS FIRST ANNUAL PROFIT

Hong Kong carrier Cathay Pacific on Wednesday reported its first annual net profit in four years, citing “significant pent-up demand for travel” as it emerges from the impact of the Covid pandemic.

Chairman Patrick Healy said that “2023 was our first profitable year since 2019” and added that the imbalance between supply and travel demand “resulted in high yields and contributed to a strong financial performance in both halves of the year.”

Hong Kong’s aviation sector has struggled to fully recover from the impact of pandemic-era policies, which imposed strict rules on travelers and kept the city internationally isolated before they began to be lifted in late 2022.

The airline has been slow to catch up with regional rivals such as Singapore Airlines, and is racing to rebuild its capacity while suffering from a manpower crunch.

The airline 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 prepandemic 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 HK$0.43 per ordinary share.

“In 2023, we finally left the Covid-19 pandemic behind us,” Healy said.

Total revenue surged 85 percent to $12 billion, though cargo revenue fell 16.2 percent to $3.3 billion.

Cathay 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.

The company said on Wednesday 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.

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,” Chief Executive Officer Ronald Lam said in an internal memo at the time.

In January, Cathay said it has signed up 100 cabin crew via its first recruitment drive in mainland China.