Hong Kong’s Cathay Pacific Group has posted its first half-year profit since 2020, with earnings soaring to HK$4.26 billion, as the group’s chair said the figure represented a “rapid rise” after heavy losses during the pandemic.
Patrick Healy, chairman of Cathay, thanked the Hong Kong government, shareholders and the public for their support during a press conference announcing Cathay’s interim results on Wednesday.
“Considering the extraordinarily challenging circumstances that Cathay faced during the pandemic, these results represent a significant improvement and reflect the growing strength of our business,” Healy said. The Cathay Group includes the city’s flagship carrier Cathay Pacific, low-cost carrier HK Express and cargo airline AHK Air Hong Kong, as well as associate interests in Air China and Air China Cargo.
The group lost a total of HK$34 billion over the past three years, Cathay told HKFP in an earlier written response. In 2020, the government gave the airline a HK$39 billion bailout.
The airline announced on Wednesday it planned to buy back 50 per cent of the preference shares held by the Hong Kong government by the end of 2023, and to buy back the remaining 50 per cent by the end of 2024.
The profit came amid a bleak outlook of the mainland Chinese economy. As the second-largest economy in the world, China’s recovery has been sluggish since it relaxed Covid restrictions last December.
Beijing announced on Tuesday a 0.3 per cent drop in consumer prices in July compared to last year, and a 4.4 per cent year-on-year decrease in producer prices in July.
When asked by reporters whether China’s economic performance had affected the airline, the group’s CEO Ronald Lam said he was paying attention to mainland China’s economic developments but the group had not yet been negatively affected.
“International flights to and from mainland China have been recovering at a relatively slow pace. Therefore, the demand for flying internationally from Hong Kong is very high, which has had a positive impact on the group,” Lam said in Cantonese.
The group said that it was close to 60 per cent of pre-pandemic passenger capacity.
“We are on track to achieve our target of 70 per cent covering 80 destinations by the end of this year, and we’re confident of reaching 100 per cent by the end of 2024,” Healy said on Wednesday.
In addition, the airline announced that it was set to purchase 32 single-aisle Airbus aircraft for Cathay Pacific and HK Express, which would be delivered by 2029.
‘Sharing the success’
Cathay’s recovery has been slower than regional rival Singapore Airlines, which reached 90 per cent of pre-pandemic passenger capacity in July.
Apart from being subject to lengthier Covid-related travel restrictions, Cathay’s recovery has also been constrained by a shortage of aircrew, its pilots’ union Hong Kong Aircrew Officers Association (HKAOA) said in a press release on Wednesday.
In October 2020, Cathay made 5,900 redundancies, including all 500 pilots of former subsidiary Cathay Dragon and 50 from the flagship carrier.
It also introduced new contracts for aircrew, which resulted in pay cuts of varying levels, HKAOA and the flight attendants’ union said at the time.
Paul Weatherilt, chairman of HKAOA, said in the press release that the group needed to hire 650 captains to return to 100 per cent of its pre-pandemic flight capacity after the redundancies and resignations from senior pilots after the introduction of new contracts.
Alex McGowan, Cathay’s chief operations and service delivery officer, said during the press conference that the group currently had “sufficient supply” of pilots.
Lam, meanwhile, said that the airline would be “sharing the success” with all of its staff. Cathay announced in July that it would provide bonuses of “up to six weeks” pay to all employees.
On Wednesday it introduced a new profit-sharing scheme for staff.
Hiring from mainland China
For the first time in its history, the group was seeking to recruit cadet pilots and flight attendants from mainland China this year, Cathay announced during Wednesday’s briefing.
“We have targeted to recruit 300 flight attendants in the mainland. So far we received 2,000 applications,” Lam said.
The group also announced in June plans to recruit 800 cadet pilots this year and next.
McGowan said on Wednesday that the cadet pilot programme had opened its door to mainland Chinese residents, adding that it has guaranteed a total of 300 cadet pilots from Hong Kong and the mainland.
Both the chair and the CEO mentioned China’s National 14th Five Year Plan in their opening and closing remarks, saying that “the Hong Kong international aviation hub has an important role to play in the overall development of China.”
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