HONG KONG: Cathay Pacific Airways said on Wednesday it would lift capacity by 10% this year but remain agile as it faces challenges such as the Middle East conflict leading to shifts in passenger and cargo traffic and volatile jet fuel prices.
The growth forecast was made as Hong Kong's flagship airline posted a 9.5% rise in full-year profit driven by higher passenger numbers and robust cargo demand.
Cathay's shares were trading more than 4% higher after it reported net profit rose to HK$10.83 billion ($1.38 billion) for the year ended December 31, beating LSEG SmartEstimate's HK$10.05 billion prediction and marking its third consecutive annual profit following three years of losses during the pandemic.
Cathay Chairman Patrick Healy said the airline expected to grow passenger capacity this year as it takes delivery of eight new narrowbody aircraft and adds frequencies and destinations to its network, which would also boost cargo capacity.
The planned growth rate, however, is less aggressive than the 26% rise in passenger capacity in 2025 at its main brand, when it added 20 destinations and grew its passenger network to more than 100 locations worldwide.
The airline faces headwinds from the ongoing Middle East conflict, which has disrupted global aviation operations, increased jet fuel costs and led some carriers to raise fares and boost fuel surcharges.
Cathay has cancelled its flights to Dubai and Riyadh through the end of March and is instead adding more services to London and Zurich, taking advantage of a spike in demand for Asia-Europe flights that avoid the Middle East.
"The prevailing global geopolitical environment is volatile, causing unexpected shifts in passenger and cargo traffic flows as well as jet fuel prices," Healy said in a statement.
Cathay had built a strong foundation to put it in "the best possible position to withstand current market turbulence, and we will remain agile as we continue to face external challenges," he added.
Revenue climbed 11.9% to HK$116.8 billion in 2025, driven by a 15.8% surge in passenger revenue as Cathay has been expanding its long-haul network to North America and Europe. The carrier flew 28.9 million passengers during the year, a 26.5% increase from 2024, achieving an 85.2% load factor.
Based at the world's busiest cargo airport, Cathay is also one of Asia's largest air freight carriers and has benefited in recent years from rising volumes of e-commerce out of China.
Its cargo operations, traditionally a pillar of its earnings, remained robust despite global trade uncertainties, with revenue edging up 1.2% to HK$24.3 billion.
The strong results enabled Cathay to announce a second interim dividend of HK$0.64 per share, bringing total dividends for 2025 to HK$0.84 per share, representing a payout of HK$5.23 billion - a 21.7% increase from the prior year. ($1 = 7.8261 Hong Kong dollars) - Reuters
