Cathay Pacific Airways Ltd’s full-year profit inched higher, defying expectations for a drop, as the carrier benefited from continued strong demand for air travel and robust cargo volumes.
Net income rose 1 percent in the 12 months ended Dec 31 to HK$9.9 billion ($1.3 billion) year-on-year, the airline said Wednesday. That was better than analyst estimates of HK$8.1 billion. Sales for the full year were HK$104.4 billion, compared with estimates of HK$103.8 billion.
The Hong Kong Special Administrative Region’s flag carrier enjoyed a strong end to 2024 — profit in the second half rose by around HK$750 million versus the previous corresponding period — after first-half net income fell 15% to HK$3.6 billion. The second half was buoyed by good cargo revenues, a narrower loss at associate Air China Ltd and lower jet fuel prices.
However, Cathay faces an uncertain outlook for its cargo unit, which typically contributes about one-quarter of revenue, amid a US crackdown on purchases from Chinese mainland online retailers and broader trade dislocations from President Donald Trump’s tariff regime.
“Of course, 2025 and beyond will not be without headwinds,” Chief Executive Officer Ronald Lam said. “Trade conflicts, as they develop, could pose challenges to Cathay cargo.” Lam added that supply chain challenges continue to rile the entire aviation industry, “impacting many airlines.”
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Cathay said in a presentation to analysts that “with the US tariff increases and uncertainty around the de minimis exemption, we are closely monitoring any impacts on air cargo demand,” referring to a rule that allows goods with a retail value of $800 or less to enter the US duty free and that President Donald Trump has mulled scrapping.
Chairman Patrick Healy described cargo as “absolutely essential to Cathay’s solid financial results.” “Clearly when it comes to international trade, we don’t like uncertainty and friction, which we’re seeing a lot these days,” he said.
Still, with Cathay and budget unit HK Express’s monthly passenger volumes now virtually recovered to pre-COVID levels, the business outlook appears relatively solid. Cathay has been able to reward staff with a bonus equivalent to about 6.2 weeks’ salary, a spokesperson said.
Cathay is also closing in on a target to expand to 100 destinations this year. Among the routes relaunched or to be started include Brussels, Munich, Rome, Dallas and Urumqi in the mainland.
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Shares in Cathay closed down 1.8 percent on Wednesday, trimming gains this year to around 15 percent, making the carrier the second-best performer in the Bloomberg World Airlines Index.
