Cathay Pacific eyes near term recovery and long term investment; part two: network rebuild continues

Cathay Pacific has made strong progress in rebuilding its short haul network, and now it is looking to do the same in its long haul and connecting markets that have been slower to bounce back.

The airline's recovery has been sufficient to support a healthy profit in the first half of 2024, even if it has slipped back from last year's impressive profit level.

Rising capacity has had the effect of softening yields from their inflated levels in 2023, and higher costs have been a factor too.

Profits have given Cathay Pacific confidence to place three major orders to address its most important medium term fleet upgrade needs. These efforts were covered in part one of this analysis.

Part two focuses on Cathay Pacific's moves to lift its flights and capacity back to pre-pandemic levels.

The airline is meeting its interim targets as it moves towards its goal of 100% recovery in terms of flight numbers by the first quarter of 2025. However, there is more of a mixed picture in terms of capacity recovery.

Short haul seat capacity is at about 85% or higher in markets such as Southeast Asia and Japan. But capacity is still languishing below 60% on mainland China routes.

Of the long haul markets, Australasia has recovered best, and the India and North America markets have also been relatively strong.

Europe is taking longer to rebound, though.

Connecting traffic is still lower in proportion to point-to-point traffic than before the COVID-19 pandemic, but Cathay Pacific aims to bring this ratio back toward 50:50.