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Hong Kong's Cathay Pacific Airways has projected its first-half profit could surge by as much as 76 per cent year-on-year, driven by robust passenger and cargo demand, improved performance from its low-cost carrier HK Express, and higher contributions from associates.
The airline group forecast a profit of about HK$6 billion to HK$6.5 billion ($765.39 million to $829.12 million) for the six months ended June 30, up from HK$3.7 billion in the same period a year earlier.
These figures incorporate a one−time gain of about HK$1.4 billion from the partial dilution of its Air China stake. Even stripping out this one-off item, the airline noted solid underlying demand across both passenger and cargo operations.
Cathay Pacific's optimistic outlook emerges as the broader aviation industry contends with a severe fuel cost shock.
The International Air Transport Association (IATA) forecast in June that global airline fuel bills would climb to about $350 billion this year from $252 billion in 2025, with jet fuel prices averaging $152 per barrel – almost 70 per cent above 2025 levels.
Despite acknowledging these significant headwinds, Cathay Pacific has managed to report stronger earnings.
Shares of the Hong Kong-listed carrier jumped more than 3 per cent in the afternoon session after being slightly lower in the morning, as the stronger profit outlook beat some analysts' forecasts. HSBC had forecast Cathay Pacific would report HK$5.1 billion in first-half profit, according to a recent note.
Cathay Cargo carried 9 per cent more cargo in June compared with a year earlier, with total tonnage in the first half of the year also up 9 per cent.
Chief Customer and Commercial Officer Lavinia Lau said semiconductor and pharmaceutical shipments were the main growth drivers, supporting its specialist Cathay Expert and Cathay Pharma product lines. Looking ahead, Lau said the group would monitor the potential impact on e-commerce flows from new customs duties on low-value imports into Europe.
On the passenger side, Cathay Pacific carried 12 per cent more passengers in June year-on-year, with available seat kilometres rising 6 per cent. For the first half of the year, passenger numbers were up 17 per cent.
Load factors held up despite June historically being a softer month, partially helped by rerouted traffic through Hong Kong amid the ongoing Middle East conflict. Demand in premium cabins also remained robust, driven by strong corporate and premium leisure travel.
"The outlook for the summer peak remains encouraging, particularly across our long-haul network," Lau said.
Budget unit HK Express was a softer spot, with the number of passengers down 4 per cent in June after the carrier trimmed capacity to offset higher fuel costs. Bookings for July are running ahead of last year, Lau said.
The group's full interim results are expected to be published in August.