<p>Cathay Pacific (293) announced a net profit of HKD 10.828 billion for last year, an increase of 9.5% year-on-year, mainly benefiting from increased capacity, stable passenger volume, and strong cargo demand. However, part of the growth was affected by the normalization of passenger revenue and losses caused by Hong Kong Express. The second interim dividend is HKD 0.64 per share, an increase of 31%. Cathay Pacific Chairman Augustus Tang expects that with the increase in flight frequencies and destinations in the route network, passenger capacity is expected to grow by about 10% by 2026, which will also drive an increase in cargo capacity. On the other hand, Cathay Pacific CEO Ronald Lam stated that due to the impact of the situation in the Middle East, aviation fuel prices in March have risen about twice compared to the average prices in January and February, and Cathay will adjust the fuel surcharge in the short term.</p>
<p>Related article: Hong Kong Airlines to increase fuel surcharge starting Thursday, up to HKD 150 for one-way flights. Cathay: Referencing aviation fuel prices, not crude oil prices.</p>
<p>Ronald Lam mentioned that flights to the Middle East have been suspended until the end of the month, and the resumption will depend on safety conditions. He also noted that there has been a short-term increase in demand for flights between Hong Kong and Europe, and Cathay will increase more related flights in the short term. Regarding the impact on ticket prices, Chief Customer and Commercial Officer Vivian Lo pointed out that ticket prices will depend on market supply and demand, and the overall market atmosphere is currently good, while Cathay is also increasing passenger capacity to respond to demand. According to the performance results, the passenger yield, which reflects ticket price levels, has declined, with Cathay Pacific's passenger yield at HKD 0.604, a year-on-year decrease of 10.3%; Hong Kong Express's passenger yield at HKD 0.442, a decrease of 15.3%.</p>
<h2>Augustus Tang: Geopolitical Turbulence Makes Fuel Price Changes Unpredictable</h2>
<p>Augustus Tang pointed out that the current global geopolitical environment is turbulent, leading to unpredictable changes in passenger and cargo flows, as well as aviation fuel prices. The ongoing supply chain disruptions and cost inflation continue to affect the delivery of new aircraft, cabin products, and components. He noted that the group has laid a solid foundation, making Cathay more resilient, efficient, and flexible, positioning it well to respond to current market fluctuations, while also maintaining flexibility in the face of external challenges.</p>
<h2>This Year's Fuel Hedging Ratio Approximately 30%</h2>
<p>Cathay's net fuel cost is HKD 31.344 billion, an increase of 10.9%; among them, fuel hedging losses are HKD 707 million, while a hedging gain of HKD 35 million is recorded for 2024. Chief Financial Officer Rachael Shen stated that this year's fuel hedging ratio is approximately 30%, with an average Brent crude oil strike price of about USD 70 per barrel. Currently, the price of Brent crude oil is USD 87.3 per barrel. She pointed out that aviation fuel prices have almost doubled compared to the average prices in January and February, reaching USD 167 per barrel, and Cathay's hedging policy targets crude oil rather than fuel, so it cannot fully hedge against the rise in fuel prices. However, she believes that the current hedging policy is still effective and will continue to use this model.</p>
<p>Cathay stated that the group's policy is to reduce the oil price risk by hedging a certain percentage of the expected fuel consumption, rather than speculating on oil prices, and hedging itself is not without risk
Related articles: IEA reportedly proposes the largest-ever release of oil reserves, member countries expected to make a decision on Wednesday</p>
<p>Four Middle Eastern countries reportedly cut oil production by one-third, accounting for 6% of global supply</p>
<h2>Cathay Pacific earns HKD 13.8 billion, up 7%</h2>
<p>During the period, Cathay Group's total revenue was HKD 116.766 billion, an increase of 11.9% year-on-year. Among them, Cathay Pacific's passenger revenue was HKD 72.454 billion, an increase of 15.8% year-on-year, while Cathay's cargo revenue was HKD 24.279 billion, growing by 1.2%. Together with other services and recoveries, Cathay Pacific's profit was HKD 13.791 billion, an increase of 6.8%.</p>
<h2>Hong Kong Express losses expand fourfold due to changes in travel preferences</h2>
<p>Hong Kong Express's passenger revenue was HKD 6.394 billion, an increase of 6.7% year-on-year, but it recorded a loss of HKD 999 million, expanding 3.9 times year-on-year. Cathay pointed out that its profitability was affected by short-term factors, including changes in customer travel destination preferences, the need for time to mature for several new routes, and some aircraft grounded due to issues with Pratt &amp; Whitney engines.</p>
<h2>Ronald Lam: Multiple measures to enhance the resilience of the express business</h2>
<p>Cathay CEO Ronald Lam stated that a long-term perspective is being taken for Hong Kong Express, expecting to continue expanding and improving efficiency based on a low-cost airline business model in the coming years, thus moving towards a path of sustainable profitability. He indicated that multiple measures have been taken to enhance business resilience, and positive results are beginning to be witnessed, with an encouraging start in the first two months of this year.</p>
<h2>2025 bonuses and profit sharing to distribute over 11 weeks of salary</h2>
<p>Ronald Lam also stated that throughout the year, a total of over 11 weeks of eligible salary will be distributed to employees in the form of discretionary bonuses and profit sharing, an increase from 10.2 weeks of salary in 2024</p>

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<p>Cathay Pacific announced a net profit of HKD 10.828 billion last year, an increase of 9.5%. Affected by the situation in the Middle East, aviation fuel prices in March doubled compared to the previous two months, and Cathay will adjust fuel surcharges in the short term. It is expected that passenger capacity will grow by about 10% by 2026. Passenger yield has slightly declined, but the overall market atmosphere is good. The Chief Financial Officer stated that the fuel hedging ratio this year is about 30%</p>

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Cathay Pacific plans to increase fuel surcharges in the short term, affected by the situation in the Middle East, with fuel prices in March doubling compared to the first two months