HONG KONG: Hong Kong's Cathay Pacific Airways said on Wednesday it expects higher first-half profit for 2026, boosted by strong passenger and cargo demand, improved performance from low-cost carrier HK Express and higher contributions from associates.
The airline group forecast a profit of about HK$6 billion to HK$6.5 billion ($765.39 million to $829.12 million) for the six months ended June 30, up from HK$3.7 billion in the same period a year earlier. The results include a one-time gain of about HK$1.4 billion from the partial dilution of its stake in Air China.
Stripping out the one-off item, underlying performance was driven by solid demand across both its passenger and cargo operations, the airline said.
The results come as the broader aviation industry grapples with a severe fuel cost shock. The International Air Transport Association forecast in June that airlines' fuel bills would surge to about $350 billion this year from $252 billion in 2025, with jet fuel prices averaging $152 per barrel, almost 70% above 2025 levels, a headwind Cathay acknowledged even as it reported stronger earnings.
Cathay Cargo carried 9% more cargo in June compared with a year earlier, with total tonnage in the first half of the year also up 9%.
Chief Customer and Commercial Officer Lavinia Lau said semiconductor and pharmaceutical shipments were the main growth drivers, supporting its specialist Cathay Expert and Cathay Pharma product lines. Strong cargo flows from mainland China into Southeast Asia also contributed, alongside resilient shipments into Hong Kong and the mainland.
Looking ahead, Lau said the group would monitor the potential impact on e-commerce flows from new customs duties on low-value imports into Europe.
On the passenger side, Cathay Pacific carried 12% more passengers in June year-on-year, with available seat kilometres rising 6%. For the first half of the year, passenger numbers were up 17%.
Load factors held up despite June historically being a softer month, helped by rerouted traffic through Hong Kong amid the ongoing Middle East conflict and a boost from the Dragon Boat Festival holiday. Demand in premium cabins also remained robust, driven by strong corporate and premium leisure travel.
"The outlook for the summer peak remains encouraging, particularly across our long-haul network," Lau said.
Budget unit HK Express was a softer spot, with the number of passengers down 4% in June after the carrier trimmed capacity to offset higher fuel costs. Bookings for July are running ahead of last year, Lau said.
The group's full interim results are expected to be published in August. ($1 = 7.8391 Hong Kong dollars) - Reuters
