Cathay Pacific announced that it would spend $13bn in seven years to upgrade its aircraft, airport lounges, and cabins. The airline is trying to regain its reputation after being hit by the pandemic and its position as a global premium carrier.
Patrick Healy is the chair of Hong Kong’s flagship airline. He said that it would “turn the page” by investing more than HK$100bn ($12.8bn), in its fleet, airport lounges, and cabins, including upgrades to Hong Kong, Beijing, and New York.
Cathay announced Wednesday that it will buy 30 Airbus widebody planes. The airline now has over 100 new aircraft on order. The company expects to introduce new flatbed business class seats in 2026 and improvements to its first-class seating in 2025.
Healy stated, “We want to be the best in the World again.” Healy said, “Investment is needed to achieve this.” “We need to invest in customer products and in our fleet. . . “We’re hoping to continue the premium pricing that we have enjoyed.”
The carrier is “confident” that its results will “enough to fund the investment program”.
Cathay has been ranked as the world’s top airline by Skytrax four times. The most recent ranking was in 2014. This year, it was ranked the fifth best airline in the world.
The airline reported a profit for the first half of HK$3.6bn ($460mn), down from HK$4.3bn a full year ago. The carrier attributed the decline primarily to lower ticket costs despite a “robust demand” for travel.
Cathay Airlines, which announced an interim dividend per ordinary share of 20 HK-cents, stated that it was well on its way to a complete recovery of passenger capacity following the pandemic by the first quarter next year. Hong Kong’s shares closed 2.4% lower.
The carrier reported that business travel, including routes from the US, Hong Kong, and mainland China as well as leisure travel, from its home market of Hong Kong, were in high demand. As flights increased, passenger yields – an indicator of profitability – decreased.
Cathay has recorded a profit for the second year in a row, following a three-year loss streak due to the coronavirus outbreak and Hong Kong’s strict quarantine restrictions. After the pilot exodus, and the effects from the pandemic, the airline was on a path of recovery.
, the airline has also been pressured by Hong Kong’s Government to increase capacity and improve service quality. A third runway is nearing completion at its home base this year. Cathay’s expansion of its international network will help Hong Kong become a major aviation hub.
Singapore Airlines, a rival airline, reported a profit surge of S$2.7bn ($2bn US) for the financial year ending March. In recent weeks, global airlines have warned about downward pressure to ticket prices. The two-year surge in travel following the reopening is showing signs of waning.
Healy stated that the reduction in airfares has been “fairly benign”, and it is “manageable”, with regards to profits. Ronald Lam, Cathay’s chief executive officer, said that while short-haul fares had dropped faster than long-haul fares this summer the revenue and ticket prices were still “satisfactory”.
JPMorgan analyst Karen Li stated in a recent note that Cathay enjoyed “healthy demand in leisure [and] in business”, as well as transit travelers in Hong Kong to and from mainland China.
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