HONG KONG – Cathay Pacific Airways said it will make its first annual profit since 2019 as passenger volumes return to near pre-pandemic levels, cementing its financial rebound from the most damaging period in the airline’s history.

Second-half 2023 results will surpass that of the first six months, paving the way for a consolidated annual profit overall, the Hong Kong-based carrier said in a statement on Nov 23. Net income in the first half was HK$4.3 billion (S$740 million).

The carrier’s recovery has lagged behind that of other airlines after Hong Kong and mainland China, the company’s key market, held on to strict Covid-19 pandemic controls longer than almost anywhere else in the world.

The airline has consistently said its performance would improve as the year progresses. It now predicts the number of passengers carried will be back to 95 per cent of pre-Covid-19 levels by the end of 2023.

Even as Cathay Pacific said it will continue to work towards fully rebuilding its flights in 2024, it warned of a number of constraints affecting the global aviation industry, including recruitment and training and supply chain challenges.

The turnaround has been credited to a “strong performance” from the airline and subsidiaries, though results from associates, chiefly Air China – in which Cathay has a 16 per cent stake – remained heavily unprofitable during the period.

The Hong Kong carrier racked up losses of almost HK$34 billion during the pandemic. The company, which raised billions of dollars in a recapitalisation, had about 21,900 employees at the end of June, including at its subsidiaries, down from 34,000 in 2019.

With a return to profitability, Cathay has started paying back its large Covid-19 bailout from the Hong Kong government-issued preference shares after securing shareholder approval in October. The airline plans to pay back all of the HK$19.5 billion preference shares by the end of July 2024. BLOOMBERG