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HONG KONG (Reuters) -Cathay Pacific Airways reported on Wednesday its best first-half profit in more than a decade and announced plans to order more planes and repay a Hong Kong government rescue package after a major turnaround in travel demand.
The interim net profit of HK$4.3 billion ($550.22 million), in line with its guidance for earnings of up to HK$4.5 billion, compared with a HK$5 billion loss a year earlier, when Hong Kong’s strict quarantine rules were in place.
“While we are still only part way along our rebuilding journey, our results for the first six months of 2023 demonstrate that we are on the right track,” Cathay Chairman Patrick Healy said in a statement.
Cathay has recovered capacity more slowly than its closest rival, Singapore Airlines (OTC:SINGY), because it faced tighter quarantine rules for longer, and needed to train more staff and bring back grounded planes.
The Hong Kong carrier expects to reach 70% of its pre-pandemic capacity by the end of the year and 100% by the end of 2024.
Cathay said it intended to exercise purchase rights to buy 32 Airbus A320neo family aircraft, looking to add to its fleet as demand rebounds.
It will also buy back 50% of the HK$19.5 billion of preference shares held by the Hong Kong government by the end of 2023, and the remainder by the end of July 2024, subject to completion of a proposed capital reduction and business conditions at the time.
Cathay issued the shares in 2020 as part of a HK$39 billion rescue package from the government and its biggest shareholders, Swire Pacific (OTC:SWRAY) and Air China (OTC:AIRYY), that shored up its finances after travel demand collapsed during the pandemic.
($1 = 7.8151 Hong Kong dollars)
