Cathay Pacific "Addition and Subtraction": The Long-Distance Voyage in Vast Horizons——Dialogue with Cathay Pacific Group Chief Executive Officer Ivan Chu

Text / Xi Zhi Wang Zenan

Above the blue sky, air currents are always turbulent. An airline that has been flying for eighty years, its greatness does not lie in how fast it flies, but in its ability to remain calm and self-correct after passing through storms, even at ten thousand meters above the sunlit clouds.

In 2026, Cathay Pacific celebrates its 80th anniversary. At this milestone, the company has delivered a record-breaking performance. On March 11, Cathay Group released its full-year 2025 results: revenue of HKD 116.766 billion, up 11.9%; net profit of HKD 10.828 billion, up 9.5%. Against the backdrop of intensified global airline competition, ongoing geopolitical turbulence, and frequent tariff fluctuations, this achievement is especially commendable.

Cathay Group CEO Ronald Lam

On March 12, Ronald Lam, CEO of Cathay Group, said in an interview: “Since 2023, Cathay Group has consecutively posted profits exceeding HKD 30 billion for three years, surpassing the losses from 2020 to 2022, which can be considered a successful turnaround.” He then emphasized that 2026 marks the first year of Cathay Group’s five-year plan and a new beginning.

Cathay Airways launches special livery to celebrate 80th anniversary

However, the outside world is also very concerned about Cathay’s earlier announced “downsizing” plan. On one hand, the lively 80th anniversary celebration and profit halo; on the other, cost-cutting measures for non-frontline staff to optimize expenses. Why choose to “tighten the belt” at a profit peak? What underlying business philosophy does this seemingly contradictory decision reveal? And for this airline, which has traveled for 80 years, how does it navigate through cycles of uncertainty?

Accelerating growth, leaping over “the hundred-foot pole”

Cathay’s full-year 2025 results set new highs in multiple key indicators, exceeding analyst expectations. After the earnings release, the stock price surged significantly. On the closing day, it rose by 4.36%, with intraday gains exceeding 5%.

From a net profit of HKD 9.79 billion in 2023, to HKD 9.888 billion in 2024, and then surpassing HKD 10.828 billion in 2025—over three years, the cumulative net profit exceeded HKD 30 billion. This is the first time in Cathay’s history that such a sustained brilliant performance has been achieved, firmly establishing its position as “China’s most profitable airline.”

Looking further back, to the “most difficult three years” in Cathay’s 80-year history as mentioned by Ronald Lam, the significance of this achievement becomes even clearer. During the pandemic, Cathay lost about HKD 30 billion. From losing HKD 30 billion to earning HKD 30 billion, it’s a stunning turnaround of HKD 60 billion. People can’t help but ask: what exactly did Cathay do right?

“Positioning, reform, morale.” Ronald Lam offers three keywords.

“Rooted in Hong Kong, backed by the motherland, connected to the world” is Cathay’s unique positioning. “Once the positioning is clear, everything from brand development to employee growth follows that direction, and things become much easier,” Lam explains. After clarifying its positioning, Cathay launched a series of internal reforms, listening carefully to employee feedback and implementing measures. Now, employee morale is at an all-time high. Happy employees bring happy customers. “When employees are happy, their service to customers improves, and this happiness is transmitted to customers, who are then more willing to choose Cathay’s products and services, ultimately leading to encouraging financial results.”

Data is the best proof. In 2025, Cathay’s passenger service contributed HKD 72.454 billion in revenue, up 15.8%; capacity increased by 25.8%, with 28.9 million passengers carried, and an 85.2% seat occupancy rate. The cargo segment achieved HKD 24.279 billion in revenue, up 1.2%, with a cargo volume of 1.677 million tons, up 9.5%. Cathay Group’s Hong Kong Express generated HKD 6.394 billion in revenue, up 6.7%; passenger capacity increased by 31.9%, with 7.912 million passengers, up 29.7%.

While performance is soaring, employees also share in the benefits. Cathay paid out eligible wages equivalent to more than 11 weeks’ worth. Based on full-year results, the board announced a second interim dividend of HKD 0.64 per share, bringing the total dividend for 2025 to HKD 0.84 per share, approximately HKD 5.2 billion in total.

After three years of successful rebuilding, Ronald Lam announced that in 2026, Cathay plans to increase passenger capacity by 10%, focusing on increasing flight frequencies on existing routes and adding new destinations such as Seattle. Currently, Cathay’s global network exceeds 100 destinations, marking a solid step toward its goal of “connecting the world.” “This is a very important milestone, but we won’t stop here. Cathay will explore more destinations, whether in mainland China, internationally, or in Belt and Road partner countries. If conditions permit, we will also strive to increase flights between Hong Kong and key cities like Beijing, Shanghai, London, and New York.”

From surviving on the brink during the three-year pandemic to three consecutive years of record profits, Cathay has achieved a remarkable comeback and leap. This reversal is not only reflected in financial numbers but also demonstrates operational resilience, accumulating “reserves” for future investments and strategic adjustments. This strategic “fuel” is fueling the airline’s journey into its next eighty years.

Expanding in Mainland China, deepening “second home”

In the past three years, the Mainland China market has undoubtedly become Cathay’s top priority and its “second main battlefield” for investment.

Looking at the route network, Cathay currently operates 24 destinations in Mainland China, with about 330 round-trip flights weekly. In 2025, five new destinations will be added, including Singapore and Urumqi by Cathay, and Yiwu, Changzhou, and Guiyang by Hong Kong Express. The airline is also increasing flights and optimizing schedules to key cities like Beijing, Shanghai, Chengdu, and Guangzhou, making it the airline with the most Hong Kong-Mainland China flights. Additionally, Cathay continues to promote multimodal transport in the Guangdong-Hong Kong-Macao Greater Bay Area and extend this to the Yangtze River Delta region. Nearly one-third of Hong Kong Express’s revenue now comes from the GBA.

More notably, Cathay’s talent recruitment remains highly eager. The core competitive advantage of the company lies in its people and culture. Mainland teams have become an indispensable part of Cathay. The total number of Mainland employees exceeds 4,000, including 800 cabin crew. The airline plans to further expand frontline roles, recruiting trainee pilots, flight attendants, maintenance engineers, as well as IT and digital specialists. “Mainland China is our most important talent source outside Hong Kong,” Lam revealed. “In 2026, Cathay plans to recruit 3,000 people worldwide.” After a recent financial briefing in Shenzhen, the team immediately flew to Beijing to recruit talent. On March 14, the first “Recruitment Experience Day” for 2026 was held in Beijing.

In terms of onboard services, cabin products are also being upgraded. The comprehensive refurbishment of Airbus A330-300 regional aircraft is expected to be completed by the end of 2026, introducing lie-flat business class seats and upgrading economy class seats. These new cabins will soon be available on flights between Hong Kong and Mainland China. On the ground, Cathay’s flagship lounge at Beijing Capital International Airport was renovated and reopened last August. The “Skyview Lounge” offers a full-service experience, covering both air and ground services—an all-encompassing investment in passenger experience and a testament to Cathay’s strength and brand promise.

The Cathay VIP lounge at Beijing Capital Airport

The Greater Bay Area remains a key investment focus. Cathay has established IT offices in Guangzhou and Shenzhen, with about 200 tech professionals, plus the Hong Kong team, totaling around a thousand IT experts. A direct shuttle bus connects Cathay City in Hong Kong to the Shenzhen office. “AI is a huge opportunity for the airline industry. Cathay invests heavily in IT—about HKD 3 billion annually—and has developed over 200 dedicated models. Digitalization is a key focus for the next five years,” Lam said. He believes that the future success of long-haul flights depends on whether aircraft are equipped with the “smartest brains”—achieving a leap from manpower consumption to efficiency through digitalization.

Deepening the Mainland market is both Cathay’s “backing the motherland” mission and a core responsibility. The Greater Bay Area and all of China are not just alternative routes but serve as the “extended headquarters” supporting Cathay’s global long-haul stability and providing a solid foundation for its farther-reaching ambitions.

“Weight reduction” and strategic recalibration: clear-headed decisions at ten thousand meters

As the company’s performance hits new highs, rumors of Cathay reassessing costs and organizational “downsizing” have emerged. This has caused some confusion. Lam admits that external conditions are changing dramatically. The Middle East situation, soaring oil prices, tariff fluctuations, trade wars—all create shocks for the industry. “In good times, we must be aware of risks, stay vigilant, and prepare for the worst,” he says. This seemingly “counter-cyclical” decision is rooted in a sober industry cycle forecast.

First, geopolitical shocks. Cathay operates daily flights from Hong Kong to Dubai and Riyadh in Saudi Arabia. Due to Middle East tensions, these routes will be suspended until March 31, with decisions on resumption pending. Lam notes: “The current global geopolitical environment is turbulent, causing unexpected fluctuations in passenger and cargo flows, as well as jet fuel prices.”

Second, the sharp rise in fuel costs. Lam reveals a startling figure: “In March, jet fuel prices nearly doubled compared to January and February.” Brent crude oil prices fluctuated wildly—spiking to $119.50 during the day on March 9, then dropping back to $83, with a 40% intra-day swing. Fuel is the largest single cost for airlines, accounting for nearly 30% of operating expenses. Doubling oil prices has an immediate impact on costs.

But it’s not just costs. Middle Eastern carriers’ capacity has sharply declined, forcing passengers who used to transfer via Dubai or Doha to find other hubs. Lam states: “In the short term, demand for long-haul flights is actually increasing.” The cargo side is similar; Middle Eastern carriers’ cargo capacity has also decreased, but “short-term demand for Cathay cargo is showing some growth.” During the route suspensions, Cathay will reallocate related capacity to other routes, especially to Europe, with plans to increase flights there in the coming weeks. “Flights from Hong Kong to Europe have high load factors, and ticket prices are rising.”

Data shows that in 2025, Europe remains Cathay’s highest load factor market at 89.2%. The Americas follow at 87.5%, including transit traffic through Mainland China via Hong Kong.

Faced with these uncontrollable external currents, Lam’s management philosophy is clear: “Control what can be controlled, and prepare well for what cannot.”

What is controllable? Cost structure is controllable. Lam reveals that Cathay will maintain its fuel hedging mechanism, with a hedge ratio of 30% for this year, unaffected by the situation. The airline has also announced plans to raise fuel surcharges to offset cost spikes. “Our goal is to preserve all our capacity, not reduce flights due to rising costs.”

Deeper responses involve organizational optimization. Lam states that whether it’s the Middle East crisis or trade wars, after normalization, external shocks will continue. Now is the time to optimize cost efficiency while the situation is best, so that in future uncertainties, the airline can remain stable and avoid large-scale layoffs like in the past. The message is clear: management must prepare for uncertainty.

Through trimming administrative redundancies and improving organizational efficiency, Cathay is proactively adjusting “load distribution” to enhance resilience against turbulence. Short-term organizational tweaks aim to maintain “high ground” during downturns. Meanwhile, industry forecasts for 2026 suggest supply growth will outpace demand, with engine shortages and ground costs still ongoing—necessitating a “lightweight” approach.

A particularly noteworthy detail: while other airlines are desperately adding seats in cabins to boost revenue, Cathay is doing the opposite—rearranging the economy cabin layout of its Airbus A321neo narrow-body aircraft to provide more spacious seats. On the surface, this reduces seating capacity and may impact revenue, but it enhances passenger experience, building better reputation and service. “One reduction, one addition”—not just simple optimization, but resource reallocation. Regardless of the adjustments, Cathay’s bottom line remains unchanged: quality and service are non-negotiable.

The goal is to cut administrative waste and strengthen frontline service and core technology. In 2025, onboard service and passenger expenses increased by 35.8%, the largest growth among operating costs—cost savings from administrative cuts are being precisely reinvested into passenger touchpoints. On the ground, Cathay’s flagship lounge at Hong Kong International Airport, “Universal Lounge,” is set for a facelift and reopens this year. Plans are also underway to open Cathay’s first lounge at New York JFK.

Hardware investments continue. Cathay has committed to investing over HKD 100 billion, much of which will be used to acquire new-generation aircraft. Over the next few years, more than 100 new planes will be delivered. The schedule is clear: in 2026, eight aircraft will be delivered—five to Hong Kong Express and three to Cathay Pacific; in 2027, the first Boeing 777-9 long-haul aircraft will arrive; in 2028, two new models—Airbus A330-900 regional aircraft and Airbus A350F freighter—will be introduced.

The new Boeing 777-9 long-haul aircraft

All these measures embody the management philosophy of Focused Excellence—focusing on value rather than price. Lam emphasizes that the focus is on quality, service, and experience. This strategic focus during peak times reflects Cathay’s deep understanding of “long-haul” operations.

Eighty years, a long voyage

A company’s operation is like an airplane flying in the sky—sometimes clear skies, sometimes turbulence. It is during turbulence that the pilot’s ability to steer and adapt is most tested. Looking back at Cathay’s eighty-year journey, perhaps what is most inspiring is not just the peak moments of glory, but the clear-headed resolve maintained amid brilliance, and the courage to navigate cycles and turn the tide time and again.

Between “adding and subtracting,” the tactics change with the times, but the core—CAN DO spirit—remains unchanged. Lam states that Cathay’s CAN DO culture means facing challenges head-on, surpassing them, and uniting even more strongly in the face of adversity.

True travelers never lose their way in prosperity. Cathay is performing an elegant high-altitude operation: trimming administrative burdens, strengthening service and technology. In an industry buffeted by unpredictable currents, this self-correction at the peak is the confidence of a world-class Chinese airline to stay steady and go far.

Eighty years, a long voyage.

Photography: Zhu Jinghui, Zhang Qiliang, Xiao Hang

Producer: Zhang Qiliang

Editing: Zhang Qiliang