Despite signs of recovery, Hong Kong's Cathay still has a job to do
1.1 per cent rise in net profit to HK$3.65 billion (US$465 million) for the first six months of 2025, compared with the same period last year. It was driven by three main factors – higher passenger volumes that absorbed lower yields, another consistent performance by its cargo operations, which sustained the airline during hard times, and lower fuel prices.
Advertisement
The result sets Hong Kong's flag carrier up to meet the challenge of intense competition, amid rising demand, from a resurgent world aviation sector. It has signalled confidence with plans to buy 14 Boeing 777-9 jets, on top of 21 of the same model scheduled for delivery in 2027 or later, bringing its total investment to more than HK$100 billion in the coming years. This is on top of the
30 Airbus aircraft added last year to a previous order for 70.
Market sentiment signalled the airline still has quite a job ahead of it, with Cathay Group's shares falling after the results and new plane orders were announced.
The challenge is reflected in the loss recorded by Cathay's budget arm, HK Express, of HK$524 million before net finance charges and taxation, up from HK$73 million in the same period last year. The impact of earthquake rumours on travel to Japan, a core market, was held to blame. However, Cathay CEO Ronald Lam Siu-por said HK Express' strong fundamentals supported confidence in the future.
Evidence that Cathay's post-Covid revenue gains are exhausted is to be found in an increase of 27.8 per cent in passenger numbers year on year in the first half of the year, compared with a rise of only 9.5 per cent in passenger revenue. At the same time, however, the cargo business again demonstrated resilience despite tariff risks amid geopolitical tensions and the trade conflict between the United States and China.
Advertisement
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
South China Morning Post
31 minutes ago
- South China Morning Post
China seeks to bolster demand by subsidising interest costs on consumer loans
China has launched a year-long plan to offer interest subsidies for personal consumer loans as part of Beijing's broader efforts to unlock household spending power and shore up domestic demand. Individuals who take out consumer loans for purchases – including single transactions below 50,000 yuan (US$6,958) and higher amounts for purchases in key sectors such as cars and education – will have part of their interest costs covered by the government, according to the plan released on Tuesday by the Ministry of Finance, the People's Bank of China and the National Financial Regulatory Administration. The authorities said the plan aims to 'better leverage fiscal funds to support and guide consumption, lower the cost of consumer credit for households, and help unlock their spending potential'. The plan will subsidise one percentage point of the annual interest on loans, capped at half of the contracted loan interest rate. The central government will cover 90 per cent of the subsidy cost, with provincial governments responsible for the remaining 10 per cent. It will run from September 1 until the end of August next year, and the authorities said they might consider extending or expanding it after assessing its effectiveness. This new personal consumer loan subsidy targets the demand side, directly benefiting individual consumers Ministry of Finance official China's top leadership has made boosting consumption a top policy priority, with Beijing having already rolled out a 30-point policy package and allocated 300 billion yuan to a consumer goods trade‑in programme.
South China Morning Post
40 minutes ago
- South China Morning Post
US and Chinese trade teams to meet again in 2 to 3 months, Trump's Treasury chief says
US trade officials will meet again with their Chinese counterparts within the next two or three months to discuss the future of the economic relationship between the two countries, Treasury Secretary Scott Bessent said on Tuesday. The comments come a day after the trading partners extended a tariff truce for another 90 days, staving off triple-digit duties on each other's goods. In an interview on Fox Business Network's Kudlow, Bessent also said Chinese President Xi Jinping had invited Trump to a meeting, but one had not been scheduled. 'There's no date,' Bessent said. 'The president hasn't accepted yet.' Trump told CNBC earlier this month that the US and China were getting very close to a trade agreement and he would meet Xi before the end of the year if a deal was struck. Bessent also said on Fox Business that the US will need to see 'months, if not quarters, if not a year' of progress on fentanyl flows before it considers reducing tariffs on China.
South China Morning Post
2 hours ago
- South China Morning Post
Standard Chartered aims to convert depositors into investors with digital platform
Standard Chartered, one of Hong Kong's three note-issuing banks, on Wednesday launched a digital platform that allows investments in fund products with as little as HK$100 (US$12.80), hoping to turn depositors into investors. Advertisement SC Invest would allow investors to choose from four fund products via their mobile phones or desktop computers, according to Alson Ho Man-chun, head of wealth solutions at Standard Chartered Hong Kong. 'We have seen that many of our depositors have stable income and are well educated, but then they have no investment experience,' Ho said. The new digital platform aims to encourage these depositors to try putting as little as HK$100 to gain some investment experience, he added. The four funds have different risk levels, one of which is a multicurrency fund, while the others are a combination of stocks and bonds based on the criteria set by the lender's chief investment officer. Alson Ho, head of wealth solutions at Standard Chartered Hong Kong. Photo: Jonathan Wong A study by Standard Chartered showed that depositors were risk averse and they worried about the high minimum investment thresholds and complicated account opening process, Ho said. They were also concerned about hidden fees and how to choose the right investment product, he said, adding that no subscription fees would be charged until the end of this year. Advertisement 'These investors may only invest a few [hundred dollars] now,' Ho said, adding that he hoped to convert these investors into premium and private-banking customers as their wealth continued to grow in the future.
