Transit demand, cargo strength and a one-time Air China-related gain helped lift the Hong Kong carrier's first-half earnings despite a steep rise in jet fuel costs.
Cathay Pacific Airways posted its strongest first-half profit in 16 years, with net income for the six months ended June 30 rising 71% to HK$6.24 billion as strong passenger and cargo demand outweighed sharply higher fuel costs. Revenue increased 25.3% to HK$68 billion, helped by travelers rerouting through Hong Kong instead of Gulf hubs during the Middle East conflict, while passenger revenue rose 26.3% to HK$43.2 billion. The result was also supported by improved performance at HK Express, stronger contributions from associates and a one-time gain of about HK$1 billion from the partial dilution of Cathay's stake in Air China. Fuel costs rose 59.1% from a year earlier and nearly doubled between the first and second quarters, though Cathay's hedging program delivered an HK$878 million gain. The airline said summer demand heading into the third quarter looks strong, but warned that elevated fuel prices and shifting competitive conditions could weigh on the second half as Gulf carriers restore flights.