Cathay soars despite Middle East worries

By the Editorial Team · Friday, August 7, 2026

Cathay Pacific posted its highest first-half profit in 16 years, with net earnings rising 71% to HK$6.24 billion, driven by strong passenger and cargo revenue despite soaring fuel costs. The airline plans to expand its fleet significantly over the next decade but remains cautious due to geopolitical tensions and potential new EU customs duties affecting cargo demand.

Cathay Pacific reported its strongest first-half earnings in 16 years as rising passenger and cargo traffic helped offset a significant increase in fuel costs, the airline announced Wednesday. Despite concerns over escalating tensions in the Middle East, the Hong Kong-based carrier remains cautiously optimistic about its near-term outlook.

For the six months ending June, Cathay’s net profit climbed 71 percent year-on-year to HK$6.24 billion (US$1.13 billion). This performance was bolstered by a HK$1.4 billion gain linked to the dilution of its equity stake in Air China. The airline’s revenue for the period grew 25 percent to HK$68.06 billion, driven by a 26 percent increase in passenger revenue and a 24 percent rise in cargo revenue.

Chairman Guy Bradley, who assumed the role in May, highlighted that jet-fuel prices—already the airline industry’s largest cost challenge—nearly doubled in the second quarter compared to the first. Cathay implemented higher fuel surcharges on flights and cargo routes to mitigate the impact. While prices dipped from their second-quarter peaks, they have recently trended upward again amid renewed Middle East tensions.

In response to the geopolitical situation, Cathay delayed the resumption of passenger and freighter services to the Middle East until October. Bradley noted that increased transit traffic through Hong Kong, as travelers sought alternatives due to regional instability, contributed to passenger revenue growth in the second quarter. On the cargo side, demand was supported by shipments of high-value technology goods connected to the data center sector and the expanding artificial intelligence industry.

Looking ahead, Cathay outlined an ambition to expand its fleet by 150 aircraft over the next decade, contingent on favourable market conditions. However, the airline faces potential challenges from new European Union customs duties on low-value imports, which could impact e-commerce-related airfreight volumes—an important segment for regional cargo traffic, according to analysis from HSBC Research. Nonetheless, the research firm underscored robust demand for premium travel in Hong Kong amid ongoing capacity constraints as a positive catalyst for earnings.

Electing to return value to shareholders, Cathay increased its interim dividend by 30 percent to HK26 cents per share. Following the earnings release, the airline’s shares rose 2.8 percent, closing at their highest price since November 2015.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.