Cathay Pacific Airways Ltd. said it will provide benefits of up to six weeks pay to employees after it announced its net income for the first half of 2023 would reach $576 million as it bounces back from Covid.
After the midday trading break in Hong Kong, Cathay's shares soared by more than 6 percent, the highest level in any year.
Hong Kong's main airline is finally joining an industry-wide revival of fortunes as travel demand rises despite more expensive airfares. If the first-half profit comes in as forecast, it would be Cathay s biggest since 2010, even though it is still operating at about half of its pre-Covid passenger capacity.
The airline's expectations for the first half have already surpassed the average full-year forecast of analysts for an annual profit of $4.2 billion.
The Covid-19 pandemic was the most challenging period in our history, Lam said in a statement, noting that the carrier recorded almost HK $34 billion in losses over three years. We are moving further and further away from those difficult days that often come with every passing week. In what the company calls a special appreciation reward, Cathay will pay employees who stayed through the pandemic up to six weeks salary in September, Lam said. For 2023 to 2025, he said, a profit-sharing program will also be introduced, adding that details on that will be shared in August.
Singapore Airlines Ltd. said in May it would give out bonuses of up to eight months pay for employees who posted record annual profits.
Cathay paid the deferred dividend of $1.5 billion on preference shares held by the Hong Kong government at the end of last month, provided as part of a recapitalization plan during the pandemic. The carrier said that it intends to pay all future dividends as they fall due and buy back the preference shares over the next 12 months, subject to market conditions.
Cathay said its first-half performance was driven by a significant improvement in results from its core airline operations and subsidiaries. Air China Ltd.'s results, chiefly, remained to drag on the company's performance. It got a $1.9 billion gain in the dilution of its Air China stake, which has dropped to 16.26%.
In June, Cathay's traffic rose 9.2 percent from May to about 1.5 million passengers. The customer and commercial officer, Lavinia Lau, said frequencies are being increased to cater to strong travel demand. Cargo demand remained flat over the summer, but it will pick up later in the third quarter.