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The Cathay Group achieved a slight gain in annual net profit despite significant softening in yields as fares continue to normalize from post-pandemic highs.
The Cathay Group reported a profit of HK$9.9 billion ($1.3 billion) for 2024, compared to an HK$9.8 billion profit in 2023. The carrier described the result as a “solid financial performance,” marking its second consecutive annual profit after returning to the black last year. The second-half performance was stronger than in the first half.
Combined passenger numbers on Cathay Pacific and group subsidiary HK Express were up 30% year-on-year in 2024 as capacity continued to recover. However, as the Cathay Pacific full-service carrier added more flights, its passenger yields dropped by 12%, which the carrier said was an expected outcome.
Yields dropped more significantly for LCC HK Express, down 23% year-on-year. This reflected the “intense competition on regional routes,” the Cathay Group said. HK Express was also affected by operational disruption due to having an average of five Airbus A320neo-family aircraft grounded during 2024 because of engine availability issues.
HK Express recorded an HK$400 million loss in 2024, reversing a profit of HK$433 million in 2023. The LCC has been growing quickly, boosting its capacity by 46% in 2024 versus a 31% increase for Cathay Pacific.
Cathay stressed that it still has confidence in the HK Express long-term business model. “A path to sustained profitability [for HK Express] can be expected as the airline continues to grow and increase its efficiencies,” Cathay said.
The group’s overall result was boosted by returns from its investment in associate carriers, most notably Air China. Associates contributed HK$288 million in profits in 2024 versus a loss of HK$1.6 billion in 2023.
The carrier predicted the yield normalization and profit contribution from associates in an outlook it released in December.
Cathay also benefitted from a strong cargo performance, with tonnage up 11% year-on-year and yield rising 3%, and a drop of 9% in the group’s fuel prices, excluding hedging.
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