Cathay Pacific executives cited confidence in the long-term performance of HK Express after losses at the low-cost carrier mounted to almost HK$1 billion ($128 million) in 2025.
The Hong Kong airline group on 11 March posted a 9.5% increase in net profits to HK$10.9 billion for 2025 on revenues up 12% at HK$117 billion. It marked a third consecutive year of profit for the group, providing what Cathay Pacific chair Patrick Healy terms a ”solid foundation for future growth”.
However, the financial performance of HK Express lagged the rest of the group, as losses widened from HK$204 million in 2024 to HK$995 million last year.
Speaking during a full-year earnings conference, Cathay Pacific chief executive Ronald Lam cited short-term factors that hit the unit’s performance, alongside the continued impact of aircraft groundings related to engine issues with its Pratt & Whitney PW1100G-powered Airbus narrowbodies.
”The most prominent factor was the change in our travellers’ preference in destinations,” Lam says. “In particular Japan was [temporarily] affected for a few months in the middle of last year because of the earthquake rumours. It had a rather big impact on demand for our Japan routes. Traditionally, HK Express was relying quite heavily on traffic to Japan and therefore they were pretty severely affected.”
He also notes HK Express launched a dozen new destinations last year, which will take time to mature and become profitable.
“If we look at the fundamentals, like aircraft utilisation, cost effiency and on-time performance, all have been trending in a positive direction,” notes Lam.
”We have also taken a number of measures to diversify our network by expanding more into southeast Asia and the Chinese mainland,” he says. He also points to efforts to diversify its point of sales beyond Hong Kong. ”We are now having a good proportion of revenue from outside Hong Kong.”
Though Lam would not be drawn on when HK Express may reach profitability, he says the operation is already seeing the benefits of these actions.
”HK Express’ performance has improved a lot in the first two months of the year,” Lam says. “So we remain confident about the long-term future of HK Express and we can see a path to profiiablity in due course.”
