Cathay Pacific Airways has finally shaken off the lingering effects of the pandemic, reporting a record operating profit.
Operating income more than tripled to HK$15.1 billion ($2.57 billion) in 2023, Hong Kong’s dominant carrier said Wednesday. That bested the previous record of HK$14.1 billion in 2010, though was broadly in line with analyst estimates of HK$15 billion.
The more closely watched net income figure came in at HK$9.8 billion — the first profit after three years of losses. Revenue rose 85% to HK$94.5 billion as the post-pandemic travel demand continued, and ticket prices rose.
“In 2023, we finally left the Covid-19 pandemic behind us,” Chairman Pat Healy said in a statement.
Cathay’s shares climbed as much as 5.1% after the results were announced, the biggest intraday gain in almost 8 months. The stock is up 10% this year.
Staff will also be rewarded for the airline’s improved financial performance, with 7.2 weeks of pay awarded as a bonus. The program was set up by Cathay as it seeks to boost employee morale.
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The extent of Cathay’s financial recovery stands out because for much of last year capacity was operating at a fraction of pre-Covid levels. It has restored flights slower than closest rival Singapore Airlines C6L , but with fewer seats available and post-pandemic travel in full swing, passengers were happy to pay over the odds for tickets.
Cathay said it expects to return to 100% of pre-pandemic flight levels by the first quarter of 2025 — three months later than previously planned. Chief Executive Officer Ronald Lam said the carrier was taking things more slowly to avoid the debacle of mass flight cancellations over the Christmas travel season that lasted into February.
Nevertheless, Lam was emphatic about the results. “Cathay is back!” he said.
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The carrier’s rebound has been aided by its main airline and subsidiaries. Associate Air China, in which Cathay has a 16.26% stake, remained unprofitable but improved significantly year-on-year, easing the drag on Cathay’s results.
Cargo revenue fell 16.2% to HK$25.6 billion last year, as earnings from air freight continued to normalize after Covid. Robust passenger ticket sales and high prices more than made up for the decline in air freight.
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The Hong Kong carrier racked up losses of almost HK$34 billion during the pandemic. Profitability is helping Cathay pay back half of its HK$19.5 billion government bailout. The airline plans a full repayment of the preference shares by the end of July.
With Cathay back in the black, its focus is turning to spending again for growth. The airline plans to buy 32 new Airbus SE single-aisle jets, several freighters, and has a potentially large wide-body order in the works.
