Cathay Pacific Airways has broken records with its operational profit report after suffering through the pandemic's aftershocks.
Chairman Pat Healy said in a statement: "We finally left the Covid-19 pandemic behind us."
In a report by Bloomberg, Hong Kong's leading airline said on Wednesday, March 13, that operating income increased by a factor of three in 2023, reaching HK$15.1 billion ($1.9 billion). The previous all-time high was HK$14.1 billion ($1.8 billion) in 2010.
With a net income of HK$9.8 billion ($1.3 billion), the much-anticipated first profit after three years of losses finally happened. As the demand for travel in the aftermath of the pandemic persisted and ticket rates increased, revenue surged 85% to HK$94.5 billion ($12 billion).
Highly-Anticipated Comeback
The announcement of the results caused Cathay's stock to surge as much as 5.1%, the largest intraday rise in over eight months. This year, the stock has increased by 10%.
In addition, the staff would recognize the airline's increased financial performance with a bonus of 7.2 weeks' salary. Cathay instituted the initiative to raise morale among its staff.
Because capacity was running at a fraction of pre-Covid levels for most of last year, Cathay's financial comeback stands out. Passengers were willing to pay a premium for tickets despite the airline's delayed flight restoration. The airline said it anticipates returning to pre-pandemic flight levels by the first quarter of 2025, which is three months later than originally anticipated.
Cathay Pacific CEO Ronald Lam claimed that the company was moving more cautiously in order to prevent a repeat of the disastrous mass flight cancellations that occurred during the last Christmas travel season, as reported by the South China Morning Post.
Prior Setbacks
According to Bloomberg, the main airline and the carrier's subsidiaries have contributed to its recovery. Associate Air China, in which Cathay has a 16.26% share, continued to be unprofitable but saw considerable annual improvement, which lessened the negative impact on Cathay's performance.
As profits from air freight continued to level out after COVID-19, cargo revenue dropped 16.2% to HK$25.6 billion ($3.3 billion) in the previous year. Despite a drop in air freight, strong demand for passenger tickets and high pricing are more than compensated.
The Hong Kong airline incurred around HK$34 billion ($4.3 billion) in damages due to the pandemic. Because of its profitability, Cathay is able to repay half of the HK$19.5 billion ($2.5 billion) government bailout.
