Cathay Pacific Group Posts 27% Operating Profit Rise and Stays on Track for 10% Capacity Growth
The group saw a 27% increase in its half-year operating profit, while net profit was up 71% year on year. Cathay Pacific Group is maintaining its full-year capacity growth guidance, with near-term demand "looking strong", and as its half-year profit improves. The Hong Kong-based airline group "remains on track" to reach its passenger capacity growth target of 10%, says Cathay chair Guy Bradley. "We remain cautiously optimistic for the rest of the year, subject to developments in the Middle East situation and other macroeconomic factors," Bradley, who was appointed airline chair in May, adds. The group, comprising mainline operator Cathay and low-cost unit HK Express, expects the "impact of elevated fuel prices" to continue for the rest of the year. Nonetheless – and if "market conditions are favourable" – the airline group is targeting to operate to 150 international points in 10 years, with 150 new aircraft set to join its fleet. For the six months ended 30 June, Cathay Group saw a 27% jump in its operating profit to HK$7.5 billion ($961 million). This was despite half-year expenses climbing 27% to HK$61.4 billion, led by a spike in fuel-related costs. Bradley notes that the group's fuel expenses close to doubled between the January-March and April-June quarters, underscoring the impact of the Middle East conflict on fuel costs. Group revenue was up 25% to HK$68 billion, on the back of strong travel demand on mainline operations, as well as significant operational improvements from HK Express. "Having got off to a strong start in the first quarter, we faced a more challenging second quarter due to the situation in the Middle East and the resulting significant increase in jet fuel prices," states Bradley. The group posted a net profit of HK$6.2 billion, a 71% jump from the year-ago period. During the period, Cathay took on non-recurring gains of around HK$1 billion, from the reduction of its shareholding in Air China in June this year.
