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Financial Results for 2024
The Cathay Group, a prominent player in the aviation industry, has disclosed a robust attributable profit of HK$9.9 billion for the year 2024. This represents a slight increase from HK$9.8 billion recorded in 2023, showcasing a solid financial performance bolstered by rising cargo demand, heightened passenger volumes, decreased fuel costs, and greater cost efficiencies compared to the previous year. The results, revealed on March 12, affirm the group’s strong recovery trajectory.
Moreover, its airlines and subsidiaries reported an attributable profit of HK$8.8 billion for 2024, down from HK$9.2 billion in 2023, after excluding exceptional items. This performance is indicative of the challenges faced by regional players, suggesting a competitive landscape that affects yields and profits.
Growth in Cargo and Passenger Services
The year witnessed a significant uptick in cargo operations, with a remarkable 11% increase in overall cargo tonnage and a 3% rise in yield as e-commerce demand surged, especially in the latter half of the year. In terms of passenger services, both Cathay Pacific and HK Express saw a 30% year-on-year increase in passenger numbers, demonstrating a strong recovery in air travel. However, increased flight availability led to normalizing passenger yields, resulting in decreases of 12% and 23% for Cathay Pacific and HK Express respectively, which reflects intensified competition on key routes.
Commitment to Dual-Brand Strategy
Cathay Group remains dedicated to its dual-brand approach, serving diverse customer needs with Cathay Pacific as a premium full-service airline and HK Express as a low-cost carrier. Despite encountering operational challenges in 2024, particularly with HK Express, due to industry-wide issues with Pratt & Whitney engines, the group retains confidence in its low-cost business model and its ability to provide an effective service at competitive prices.
Additionally, HK Express has been recognized as the world’s fastest-growing airline, and was recently listed among the top five low-cost airlines globally, which reflects its rapid expansion and commitment to affordability.
Financial Strategies and Investments
The Cathay Group’s chair, Patrick Healy, emphasized that the solid performance has enabled important strategic initiatives, including share buybacks and dividend payments to shareholders. In July 2024, Cathay repurchased 50% of preference shares from the Hong Kong Government for HK$9.8 billion, alongside paying nearly HK$4 billion in dividends throughout the shareholding period. Furthermore, a second interim dividend payment of 49 cents per share was announced, bringing total ordinary share dividends for 2024 to HK$4.4 billion.
Enhancements in Fleet and Customer Experience
Healy articulated an optimistic vision for Cathay’s future, stating intentions to invest over HK$100 billion into enhancing their operations, aligning with the launch of the Three-Runway System in Hong Kong. The group is in the process of integrating over 100 new-generation aircraft into its fleet, coupled with advancements in cabin interiors and digital experiences, to elevate customer engagement and satisfaction significantly.
Outlook for Associates and Network Expansion
Results from associated airlines have also seen improvement. A profit of HK$288 million was recorded from their associates, a marked contrast to a loss of HK$1.6 billion in 2023, highlighting a recovery in the civil aviation sector. Noteworthy improvements from Air China included enhanced fleet efficiency and cost management strategies.
Looking ahead, Cathay Group has announced 11 new destinations for 2025, with plans for continued expansion to serve more than 100 global destinations through both Cathay Pacific and HK Express. This strategic growth aims to reinforce Hong Kong’s position as a world-leading aviation hub.
Key Takeaways
The Cathay Group’s progress in 2024 underscores a positive recovery trend in the aviation sector driven by increased demand in both passenger and cargo transport. With a dual-brand strategy intact, the organization aims to meet diverse travel needs while continuing to innovate in both service and operational efficiency. As global travel patterns shift, the effectiveness of established airlines like Cathay and HK Express is poised to play a vital role in shaping connectivity and transport strategies worldwide.
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