Cathay Cargo revenue falls 16%

The Cathay Group today reported total revenue of HK$94.4 billion ($12 billion) in 2023, an increase of 85% year over year, making it the first profitable year for the carrier since 2019. Cathay’s cargo business, however, declined 16% YoY to $3.2 billion. [caption id="attachment_57141837" align="alignright" width="300"] (Courtesy/Cathay Cargo)[/caption] THE BIG PICTURE : Marked by normalization, passenger recovery and lifted restrictions, Hong Kong’s flagship carrier saw a year of “rebuilding and investing,” according to Cathay’s earnings report. “Throughout the year, we dedicated ourselves to rebuilding our brand, flights and home hub, whilst also making strategic investment decisions that will benefit our customers, our people and Hong Kong as a whole,” Cathay Pacific Chief Executive Ronald Lam said in the earnings report. BY THE NUMBERS : Cathay recorded a net profit of $1.3 billion in 2023, a 33% YoY increase and the highest profit since 2010. In its fourth-quarter earnings report, the airline reported: Cargo tonnes carried increased 20% YoY to 1.3 million; Cargo capacity increased 60% YoY to 13.1 billion available cargo tonne kilometers; Cargo load factor declined 8.6 points to 62%; and Cargo yield of 35 cents, a decrease of 41% YoY. WHAT THEY’RE SAYING : E-commerce growth out of Asia is boosting Cathay’s cargo demand. “In terms of our cargo business, we anticipate continued strong demand from e-commerce in our home market of Hong Kong and the wider Greater Bay Area,” Lam said in the earnings report. “However, we expect trade flow directional imbalances to persist, impacting overall load factors,” he said. “Moreover, as the air cargo industry continues to normalize, yields will decrease in 2024, but are expected to remain above 2019 levels.” STATE OF PLAY : Cathay estimated that it will reach 80% of its pre-pandemic passenger flights by the second quarter of 2024. “We are now working towards reaching 100% within the first quarter of 2025,” Lam said in the report. “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 as we look ahead to the exciting opportunities presented by the upcoming three-runway system at Hong Kong International Airport.” FLASHBACK : Cathay Pacific ranked No. 13 on Air Cargo Next ’s Freight 50 list of top cargo carriers in 2022. FUTURE LOOK : Cathay announced plans to expand its workforce by 20% or about 5,000 employees in 2024. “Our recruitment and training activities will continue in earnest as we explore all options available to us,” Lam said in the report. “Furthermore, we are significantly increasing our training activities in 2024, more than doubling the levels seen in 2023.” MARKET OUTLOOK : Shares of Cathay Pacific [OTCMKTS: CPCAY] were up 6.6% from market open to $5.80 at market close. Cathay Pacific has a market capitalization of $7.39 billion. Editor’s note: All figures have been converted to U.S. dollars. Register here for Air Cargo Next ’s free webinar, “The Role of Drones in the Future of Air Cargo,” on Tuesday, March 26, at 11 a.m. ET.

Cathay Cargo revenue falls 16%

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