Cathay Pacific Expects Positive Financial Results in H1 2023, Aims for First Profitable Half-Year Since 2019

Cathay Pacific, the renowned airline, is highly optimistic about its future prospects as it anticipates ending the first half of 2023 on a positive note in terms of financial performance.

According to Lavinia Lau, the Chief Customer and Commercial Officer of Cathay Pacific, the Cathay Group has experienced a strong rebound in its airlines’ performance, resulting in improved cash flow. Notably, the Group has been operating cash generative in 2022 and has continued this trend into 2023. Additionally, the airline’s decision to reduce its stake in Air China from 18.13% to 16.26% is expected to yield a non-cash gain of approximately HKD1.9 billion ($242.6 million).

Considering these factors and accounting for the offsetting impact of associate results reported with a three-month delay, Lau expressed confidence that the Group would deliver a consolidated profit for the first half of 2023 based on the airline’s May 2023 traffic results.

In May 2023 alone, Cathay Pacific served a total of 1.4 million passengers, with the Year-to-Date (YTD) passenger numbers reaching 3.2 million. Throughout the month, the average load factor stood at 85.1%, with a YTD load factor of 87.1%.

The airline’s remarkable passenger growth in May 2023 and YTD is noteworthy, with an astounding increase of 2345% and 3281%, respectively, compared to the same period in 2022. The loosening of lockdown measures in China and Hong Kong played a significant role in driving this surge in demand. In terms of demand, the majority of the 5.8 billion Revenue Passenger Kilometers (RPK) came from North America (1.5 billion) and Europe (1.4 billion), with South East Asia emerging as Cathay’s third-largest market in May 2023, registering 767.8 million RPKs.

Looking ahead, Cathay Pacific is optimistic about the upcoming peak summer season, as the airline expects a boost in passenger numbers with the return of students to Hong Kong after the school term concludes.

Should the airline achieve profitability in the first six months of 2023, it would signify a significant milestone as its first profitable H1 since 2019 when it recorded a net profit of HKD1.3 billion ($166 million). Notably, Cathay Pacific ended 2019 with a net profit of HKD1.6 billion ($204.3 million), and between 2020 and 2022, its only profitable period was H2 2021 when it reported a net profit of HKD2 billion ($255.4 million).