Cathay Pacific says profit drops 15% on lower fares, declares dividend

Hong Kong's Cathay Pacific Airways declared on Wednesday (Aug 7) an interim dividend, citing strong performance, even as first-half profit dropped 15 per cent from a year ago which the airline attributed mainly to lower air fares.

"Our strong performance for the first six months of the year was primarily driven by the ongoing robust demand for travel, and the solid performance of our cargo business," Chair Patrick Healy said in a statement.

A global imbalance between supply of flights and travel demand last year after pandemic travel restrictions were lifted drove up ticket prices and passenger yields - a measure of flight profitability.

But as global capacity has been largely restored airlines this year have reported normalising yields and softening fares.

Cathay's group load factor, or share of seats sold on flights, fell to 82.4 per cent from 87.2 per cent in the first half of 2023.

The passenger yield decreased by 11 per cent to HK68.9 cents, the company said.

Healy said the 15 per cent drop in profit year-on-year to HK$3,846 million for the six months ending June was "principally attributable to the normalisation of ticket prices".

Cathay, which made heavy losses and layoffs during the COVID-19 pandemic, reported its first annual profit in four years in March, and paid its first dividend since 2019.