Direct Coverage of Earnings Call | Cathay Pacific Airways' 2025 Profit to Exceed HK$1 Billion Again: Multiple Measures to Address Fuel Cost Volatility, Continued Encryption of Mainland Route Network

Daily Economic News Reporter: Kong Zesi    Daily Economic Editor: Wen Duo

In 2025, Cathay Group (HK00293, stock ticker Cathay Pacific, but in China referred specifically to the passenger business of the company) once again becomes the most profitable airline in China.

“From 2023 to 2025 is the best three-year period in Cathay Group’s history, with high-level financial performance for three consecutive years… It can be said to be a successful outcome,” said Cathay Group CEO Lin Shaobo at a media briefing in Shenzhen on the afternoon of March 12.

In 2025, Cathay Group achieved revenue of HKD 116.766 billion, an 11.9% increase year-over-year; net profit attributable to shareholders was HKD 10.828 billion, up 9.5%. The company stated in its earnings announcement that the performance was supported by increased capacity, stable passenger traffic, and strong cargo demand, although some of the growth in revenue was offset by normalized passenger revenue and losses from its subsidiary Hong Kong Express Airways (hereinafter Hong Kong Express).

Cathay Group Media Briefing Photo Source: Daily Economic News Reporter Kong Zesi

How to Respond to the Surge in Fuel Prices?

In 2025, Cathay Pacific, under Cathay Group, carried 28.871 million paying passengers, a 26.5% increase; cargo volume reached 1.677 million tons, up 9.5%. However, both revenue margins saw slight declines.

Liu Kaishi, Chief Customer and Business Officer, explained that the group (including Cathay Pacific and Hong Kong Express) added 20 new routes in 2025, bringing the total to over 100 routes. The company plans to increase capacity by another 10% this year.

In 2025, Hong Kong Express’s passenger revenue was HKD 6.394 billion, up 6.7%, but its losses widened to HKD 996 million. Hong Kong Express CEO Mao Jieqiong said that the traditional peak season demand was affected by rumors and other factors, but the company’s performance in the first two months of 2026 has already improved significantly, and they hope to gradually turn losses into profits.

Recently, changes in the international situation have impacted the Middle East aviation industry, causing fluctuations in fuel prices. Cathay Pacific also noted in its earnings report that ongoing supply chain disruptions and inflation continue to affect the delivery of new aircraft, cabin products, and parts.

Lin Shaobo told Daily Economic News that due to reduced capacity among Middle Eastern airlines, many passengers traveling to Europe and the Americas choose to depart via Hong Kong and other hub cities, leading to a short-term increase in long-haul flights and cargo volume.

“Another global impact is the sudden surge in aviation fuel prices. In March, fuel prices doubled compared to January and February, putting great pressure on flight costs,” Lin Shaobo said. “We have a series of measures to control costs: first, hedging 30% of our fuel; second, increasing fuel surcharges for passenger and cargo services accordingly, aiming to maintain current capacity and prevent flight reductions due to costs.”

Continuing to Expand Mainland China Routes

2026 marks Cathay Group’s 80th anniversary. Among the company’s existing routes, over 20 are within mainland China, and more than 80 are international. During the Shenzhen briefing, the company broadly addressed how to effectively “rely on the motherland and connect with the world.”

Cathay Group management stated that in 2025, the company added 5 new routes within mainland China, bringing the total to 24. They are also continuously expanding routes and optimizing schedules in cities like Beijing and Shanghai. In recent years, the company has increased the number of mainland crew members, added Mandarin elements, and incorporated more mainland films into onboard entertainment.

How does Cathay Pacific and Hong Kong Express, under the same brand, differentiate their development in mainland China?

Liu Kaishi explained that Cathay Pacific focuses on high-end comprehensive services, while Hong Kong Express is a light “value” airline offering more options. In customer targeting, Hong Kong Express focuses more on price-sensitive travelers; in terms of routes, besides popular destinations, it has expanded to emerging cities like Yiwu, Changzhou, and Guiyang, achieving direct flights from Hong Kong to these cities for the first time.

Regarding route expansion, Lin Shaobo said the company plans to invest over HKD 100 billion, with more than 100 new aircraft to be put into operation in the coming years. By 2027, Cathay Group will receive the new generation Boeing 777 long-haul aircraft, and by 2028, Airbus A330, Airbus A350 cargo aircraft, and other models will be introduced.