Cathay Pacific projects a return to pre-pandemic capacity three months later that previously forecast amid “truly significant” challenges facing the aviation sector.
The Hong Kong-based group, disclosing its first profitable year since 2019, expects to reach 80% of pre-Covid passenger flights in the second quarter, having hit a target of 70% by December serving 80 destinations.
Chief executive Ronald Lam said: “We are now working towards reaching 100% within the first quarter of 2025.
“We acknowledge this would be up to three months later than our previous projections; however, we have learned from our recent experiences and our focus continues to be rebuilding in a measured and responsible manner.
“We are committed to continuing our rebuild journey in 2024. We have seen that the magnitude of the challenge that the aviation industry faces is truly significant.
“These challenges include but are not limited to recruitment, training and supply chain shortages. We are navigating similar challenges and are working diligently to mitigate their effects on our operations.”
He pointed to a significant pent-up demand for travel following three years of Covid-19 pandemic disruptions creating a “unique environment,” in which there was a global imbalance between supply and demand that drove up yields.
“We expect this imbalance to diminish and yields to continue to normalise throughout 2024 as airlines around the world continue to add capacity,” Lam added.
“However, there will continue to be an impact from inflationary pressure along the entire aviation supply chain, which has persisted since the pandemic.”
A new business class, called Aria Suite, is to be introduced this year together with a revamped premium economy cabin as part of a redesign of long-haul Boeing 777-300ERs.
This will be followed in 2025 by a new “world-leading” first class on our Boeing 777-9 aircraft.
A new regional in-flight offering on the airline’s Airbus A330 fleet will be introduced featuring flat beds in business class.
“We are committed to continuously enhancing our customer experience, including in our lounges, dining, inflight entertainment and our service delivery over the coming years,” Lam said.
Chair Patrick Healy reported a group attributable profit of HK$9.8 billion ($1.25 billion) in 2023 against a loss of HK$6.6 billion the previous year.
He said: “2023 was our first profitable year since 2019. The year was characterised by a notable surge in travel demand following three years of pandemic-related restrictions.
“This imbalance between supply and demand resulted in high yields and contributed to a strong financial performance in both halves of the year.
“In 2023, we finally left the Covid-19 pandemic behind us. Our primary focus has been on rebuilding Cathay for the benefit of our customers, our people, our shareholders and the Hong Kong international aviation hub.
“As we continue to rebuild our flights, we expect the supply and demand imbalance experienced in 2023 to diminish, and the normalisation of yields seen in recent months to continue throughout 2024.
“We acknowledge the significant challenges that persist in the global aviation industry. These include recruitment and training of customer-facing employees as well as supply chain constraints.”