(Dec 20): Cathay Pacific Airways Ltd projected “strong” financial results in the second half (2H) of the year, aided by increased cargo demand and lower fuel prices.

Hong Kong’s de-facto flag carrier said its expected results will be partially offset by a continued normalisation of passenger yields, according to a stock exchange filing on Friday. 

“The second half of the year has historically been the stronger of the two halves for the Group and this has been the case this year as it was in 2023,” Cathay’s chief customer and commercial officer Lavinia Lau said.

Results from associates, which include Air China Ltd, are expected to improve compared with the first half (1H), the airline said. Cathay’s net income in 2H of 2023 was HK$5.5 billion (RM3.19 billion).

Analysts project Cathay will deliver full-year net income of around HK$7.5 billion, lower than its 2023 results. First-half net income fell 15% to HK$3.6 billion from a year earlier as post-Covid travel demand normalised.

A strong profit performance would buck the trend of peer Singapore Airlines Ltd (SIA), which reported a sharp fall in its fiscal 1H net income. Both Cathay and SIA have no domestic market to rely on, and the international routes the Hong Kong carrier operates are facing heightened competition. The pair have seen yields — a key metric of profitability — weaken from post-pandemic highs.

Separately, Cathay confirmed its 15.87% stake in Air China has been diluted to 15.09%. a new multi-year low, after China National Aviation Holding Company (CNAC) raised its stake in the national carrier. Cathay at one point held a 20.13% stake in Air China.

The dilution will enable Cathay to report a non-cash gain of HK$500 million.

CNAC spent six billion yuan (RM3.7 billion) to buy almost 855 million newly issued Air China A-shares on Dec 10, according to a HKEX disclosure filing published on Monday.

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