Hong Kong’s flagship carrier Cathay Pacific is delaying its target for returning to pre-Covid capacity despite posting its first annual profit for four years, as the pilots’ union raised concerns that pandemic pay cuts would damage Hong Kong’s role as an aviation hub.
Patrick Healy, chairman of the Cathay Group, announced on Wednesday that Cathay’s airlines, subsidiaries and associates had recorded a net profit of HK$9.8 billion for the year 2023, compared to a loss of HK$6.6 billion in 2022.
“Our results in 2023 were driven by the strong pent-up demand for travel following three years of pandemic-related restrictions,” Healy said. “This unique environment, in which there was a global imbalance between supply and demand, drove up yields,” he added.
However, citing the need to ensure growth was sustainable, Healy announced the group would delay its target of restoring 100 per cent of its passenger flight capacity to the first quarter of 2025.
After surviving almost three years of strict Covid-related travel restrictions that brought Hong Kong’s travel and tourism to a near-standstill, Cathay last year announced plans to fast-track its recovery.
It set a target of returning to full capacity by the end of 2024 when announcing its half-year profit last August.
Paul Weatherilt, leader of the Cathay’s pilot union, said on Wednesday that reduced remuneration for pilots and cabin crew had “decimated” Hong Kong’s role as an aviation hub.
During the pandemic, the Cathay group made 5,900 redundancies, including all 500 pilots of former subsidiary Cathay Dragon and 50 from its flagship carrier. It also introduced new contracts for aircrew, which resulted in pay cuts of varying levels and a wave of pilot resignations.
“The permanent cuts to frontline staff and their pay – virtually unseen elsewhere in the world – have decimated Hong Kong’s aviation skills base such that the growth of Hong Kong’s aviation sector and our airport’s global hub status have been seriously hindered for years,” Weatherilt said in a statement.
On Wednesday, Cathay announced a bonus of 7.2 weeks of pay for all staff.
Weatherilt said the bonus would “do little to raise morale of frontline staff” as it was based on significantly reduced pay. The union said that while aircrew had suffered a permanent pay cut, Cathay’s executives “have restored their own pay in full.”
High fares
The price of Cathay’s flights also remained high compared to pre-pandemic levels, attracting complaints on online forum Reddit.
According to an HKFP search on Thursday, a round-trip economy fare from Hong Kong to London in May is priced from HK$7,000, while the same trip in August costs at least HK12,000.
Cathay announced its passenger yield for 2023 as HK$76.3 cents, an 18 per cent decrease compared to 2022 but still 42 per cent higher than 2019. Passenger yield, a measure of the average fare paid per mile, per passenger, is an index often used to estimate ticket prices.
On Wednesday Healy said “inflationary pressure along the entire aviation supply chain has persisted since the pandemic and will continue to have an impact on airfares.”
Support HKFP | Policies & Ethics | Error/typo? | Contact Us | Newsletter | Transparency & Annual Report | Apps
Help safeguard press freedom & keep HKFP free for all readers by supporting our team
LATEST FROM HKFP
HKFP has an impartial stance, transparent funding, and balanced coverage guided by an Ethics Code and Corrections Policy.
Support press freedom & help us surpass 1,000 monthly Patrons: 100% independent, governed by an ethics code & not-for-profit.
