Cathay Pacific Airways’ net profit climbed by 9.5 per cent to HK$10.82 billion (US$1.39 billion) in 2025, driven by increased capacity and robust cargo demand, but the Hong Kong flag carrier has warned of higher fuel surcharges due to conflict in the Middle East, ongoing supply chain disruptions and inflated costs.
Cathay Group chairman Patrick Healy said on Wednesday that the results marked the airline’s third consecutive year of profits. But he cautioned that global geopolitical tensions were unsettling businesses and pushing up fuel prices.
Hong Kong is feeling the impact of ongoing tensions in the Middle East, as joint US-Israel strikes on Iran have disrupted air travel, oil exports and supply chains, prompting the airline group to cancel all flights to Dubai and Riyadh for March.
Hong Kong Airlines on Thursday became the first local carrier to announce a fuel surcharge increase of as much as 35.2 per cent.
Cathay Pacific, meanwhile, said it expected that fuel surcharges would also go up because of doubled jet fuel prices.
“The prevailing global geopolitical environment is volatile, causing unexpected shifts in passenger and cargo traffic flows as well as jet fuel prices,” Healy said. “Ongoing supply chain disruptions and cost inflation continue to impact the delivery of new aircraft, cabin products and parts.
“However, we have built a strong foundation which has made Cathay resilient, efficient and adaptable. This has put us in the best possible position to withstand current market turbulence, and we will remain agile as we continue to face external challenges.”
The net profit for the year that ended December 31, 2025, included a one-off gain of HK$878 million in other income from a settlement related to an aircraft parts management joint venture with Hong Kong Aircraft Engineering Company.
Excluding this gain, the group’s underlying operations recorded a 12.9 per cent increase in net profit to HK$9.99 billion in 2025.
Cathay Group’s revenue rose by 11.9 per cent year on year to HK$116.77 billion in 2025, driven by substantial growth in passenger capacity and traffic, along with an 8.3 per cent increase in cargo capacity.
But HK Express reported a HK$996 million loss before net finance charges and taxation last year. This was nearly five times the HK$204 million loss recorded in the year before that, despite revenue rising by 6.7 per cent from 2024 to HK$6.39 billion.
Cathay Group attributed the loss to short-term factors, including unfounded predictions of an earthquake that hurt demand for flights to Japan, the launch of multiple new routes that would take time to mature, and the continued grounding of some aircraft due to industry-wide Pratt & Whitney engine issues.
Cathay CEO Ronald Lam Siu-por said the group would take a long-term view on HK Express and remained confident in its low-cost business model.
“We have been taking measures to elevate the business’s resilience and are starting to see some positive impact, with the first two months of 2026 off to an encouraging start,” he added.
In 2024, it attributed the situation to the grounding of an average of five Airbus A320neo aircraft throughout the year because of problems with Pratt and Whitney engines.
Lam said the group was expected to expand passenger capacity by about 10 per cent in 2026 with the delivery of eight new narrowbody aircraft this year.
Passenger revenue for premium carrier Cathay Pacific rose by 15.8 per cent year on year to HK$72.45 billion.
The group’s airlines earlier reported carrying more than 36 million passengers in 2025, a 27 per cent increase year on year, while Cathay Cargo transported 9.4 per cent more goods, totalling 1.67 million tonnes.
Lam said that after a “successful rebuild over the past three years”, all of Cathay’s available aircraft were now fully resourced and flying.
He added that following record-high recruitment and training levels in recent years, the airline’s workforce had now entered a steady state aligned with its growth plans.
Healy revealed that the company would propose its second interim dividend payment of 64 HK cents a share, taking the full-year payout to 84 HK cents.
“We expect to grow passenger capacity by around 10 per cent in 2026 as we add frequencies and destinations to our network, which will also contribute to increased cargo capacity,” he added. -- SOUTH CHINA MORNING POST
