Cathay Pacific Airways on Wednesday reported marginal full-year profit growth as airfares fell amid intense competition at a time when Asia's airlines are continuing to get back to pre-pandemic seat capacity.

The city’s flagship airline posted a one percent rise in its group net profit of HK$9.89 billion for the year ended December 31, supported by elevated cargo demand, more passengers, lower fuel prices and cost efficiencies.

Shares in the Hong Kong-listed airline jumped almost four percent to their highest since May 2019 just after the results were announced.

Cathay Pacific's full-service airline, however, saw its annual yield, a proxy for airfares, fall 12 percent, while yields at the group's fully owned low-cost carrier HK Express fell 23 percent year on year.

HK Express reported a full-year loss of HK$400 million compared to a profit of HK$433 million in 2023.

Cathay attributed the drops at HK Express to intense competition on regional routes pushing airfares down and industry-wide issues with the Pratt & Whitney engines that power its Airbus A320neo planes, which grounded some aircraft in 2024.

"A path to sustained profitability can be expected as [HK Express] continues to grow and increase its efficiencies," Cathay said.

The airline's cargo yields, meanwhile, rose three percent year on year and the airline carried 11 percent more cargo tonnage, although Cathay warned that developing global trade conflicts could pose challenges to its freight business.

"Given the global geopolitical situation, we are cautiously monitoring any short-term impacts on air cargo demand," it said.

Speaking at a press conference, Cathay's chief customer and commercial officer, Lavinia Lau, noted that shifts in global trade policies, such as de minimis changes, have increased uncertainties over the cargo market.

She pointed out that the airline has contingency plans to handle unexpected changes.

"We have always built in flexibility in our business, meaning that if we see demand from a certain country or region having changes, we can always shift our network and flights to other parts of the world," she said. (Additional reporting by Reuters)
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Last updated: 2025-03-12 HKT 18:59