Prehearsing the "Cold Winter" in Spring: How Cathay Pacific Runs on a "Growth Curve"

Why did Cathay Pacific choose a restrained strategy at the peak of profitability?

On March 11, Cathay Pacific Group released its full-year results for 2025, reporting a net profit attributable to shareholders of HKD 10.83 billion, a year-on-year increase of 9.5%. For an airline with an 80-year history, this marks the third consecutive year of delivering a robust and impressive performance.

If we extend the timeline, the significance of these results becomes even clearer. In 2023 and 2024, the group recorded net profits of HKD 9.789 billion and HKD 9.888 billion, respectively; combined with the 2025 figures, the total profit for the three years has exceeded HKD 30 billion, not only filling the losses incurred during the pandemic but also maintaining its position as the top performer among Chinese airlines.

However, despite three consecutive years of high profitability, the signals released by Cathay Pacific are not solely about expansion; rather, they are calm, restrained, and even carry a sense of rationality in proactively responding to cycles.

On March 12, during a performance communication meeting held in Shenzhen, Cathay Pacific Group’s CEO, Ronald Lam, stated that the past three years have been the best period in Cathay’s history, but the more successful one is, the more one needs to be prepared for the future by improving cost efficiency to strengthen the company’s ability to face future uncertainties, thereby ensuring that the team, operations, and customer experience can remain stable in the long term.

This is not conservatism, but rather a more mature business judgment. Three consecutive years of profitability have provided a more solid foundation for Cathay Pacific’s development, allowing it to face industry cycles and market changes with composure. In Cathay’s view, the key now is not to blindly expand during favorable conditions but to enhance operational resilience through optimizing organizational efficiency and business processes while preserving space for continuous investment in products, services, and customer experience.

Ronald Lam discusses Cathay’s next strategic steps at the Shenzhen performance meeting on March 12.

The logic behind this is not complex. The aviation industry has never been one that can sustain long-term linear growth. Price competition, fuel volatility, geopolitical issues, supply chain tensions, and delays in aircraft deliveries—any one of these variables can quickly erode profits. The recent situation in the Middle East leading to rising fuel prices is the latest example.

Ronald Lam revealed during the Shenzhen communication meeting that Cathay Pacific has hedged about 30% of its fuel for 2026, and will also adjust passenger and cargo fuel surcharges to offset cost pressures. “Last year was a trade war, this year is the Middle East crisis; no one knows what will happen in the next five years,” he said.

Therefore, the “adjustment” emphasized by Cathay at this stage is essentially not about contraction, but about ensuring that the next phase of growth is more stable and sustainable. Meanwhile, the group’s long-term investment plans have not changed, and it will continue to invest over HKD 100 billion into fleet renewal, product service upgrades, and digital innovation, while also continuing to recruit talent in key frontline areas such as operations, technology, and customer experience.

Where does growth come from besides resilience?

If improving operational resilience is Cathay’s proactive preparation for changes in the industry cycle, then continuously deepening its presence in mainland China reflects its judgment on important sources of growth for the next phase.

Under the continued reinforcement of its positioning as “rooted in Hong Kong, backed by the motherland, and connecting the world,” mainland China has become an important growth engine for Cathay. Over the past few years, Cathay has been continuously expanding its domestic destinations. By 2025, Cathay Pacific, along with Hong Kong Express, will add five new mainland destinations, covering 24 points in mainland China, including key cities such as Beijing, Shanghai, Guangzhou, Chengdu, Changsha, and Urumqi. Currently, Cathay is also the airline operating the most flights between Hong Kong and the mainland.

However, what is more noteworthy than network expansion is the change in organizational structure.

In 2025, Cathay will add the management position of “Mainland China Director,” to be held by Cheung Ka-Cho. This change itself is a clear signal: the mainland market is no longer just an important component of Cathay’s network; it is a key support point in its future growth layout.

Cheung Ka-Cho, Cathay’s Mainland China Director.

In an interview with Jiemian News, Cheung Ka-Cho mentioned that Cathay is deepening its mainland layout on two levels: on one hand, extending some headquarters functions into the Greater Bay Area to be closer to the market frontlines; on the other hand, continuously strengthening talent recruitment and training in the mainland and enhancing the understanding of the Chinese market in management culture.

This means that Cathay’s deep cultivation of the mainland market is no longer just about “opening a few more routes,” but is beginning to enter a stage of organizational embedding and operational advancement.

Cheung Ka-Cho revealed that his office is located in Shenzhen’s Houhai, and functions such as sales, marketing, and customer experience are already being developed locally. At the same time, Cathay has established IT offices in Guangzhou Pazhou and Shenzhen Qianhai, with about 200 IT personnel currently supporting the group’s digital transformation.

Behind this layout is Cathay’s shift from “viewing the mainland from Hong Kong” to a market operation logic of “Hong Kong pivoting to the mainland’s depth.”

Cathay’s IT office in Shenzhen.

This organizational advancement is not merely a change in posture; it is influencing daily decision-making. Whether in route planning, product design, or service details, feedback from the mainland market is increasingly entering operational processes. In addition to Hong Kong International Airport, cities like Guangzhou and Shenzhen are becoming important source markets, and the convenience of Greater Bay Area travelers transferring through Hong Kong to reach the world continues to reinforce Cathay’s hub role in the regional aviation network.

Competing not on price, but on “experience.”

However, the mainland market has never been one that can be won solely by adding routes. Faced with increasingly fierce price competition, Cathay has chosen not to follow the path of “cutting services and reducing prices,” but instead to allocate resources to areas with more differentiated value.

In recent years, Cathay has continuously focused on upgrading inflight dining, onboard entertainment, and cabin experience. In terms of catering, it launched the “Savor Chinese Cuisine” business class meal, bringing China’s eight major cuisines to 10,000 meters in the air; the inflight entertainment system has also added more content from mainland films and TV shows, such as “The Lychee of Chang’an” and “Nanjing Photo Studio.”

Regarding cabin products, the “Elegant Business Class” was introduced on the 777-300ER, while the regional A330 routes will feature the new fully flat “Elysium Business Class.” At the same time, listening to customer suggestions, Cathay reduced the number of economy class seats on the narrow-body A321neo to create a more spacious cabin.

Cathay’s “Elysium Elegant” business class render.

In terms of ground services, besides the reopening of the Beijing lounge last year, the New York Kennedy Airport lounge and the Hong Kong Plaza Premium First Class lounge will also gradually meet passengers.

Cathay Pacific’s Beijing lounge.

From the financial report data, “inflight services and passenger spending” saw a year-on-year increase of 35.8% in 2025, the highest growth among all expenditures. The logic behind this is clear: improving cost efficiency does not mean cutting services, but rather concentrating resources on areas that can create brand premium.

All these investments point to a clear goal: to become the most beloved service brand for customers.

This also means that Cathay’s competition in the mainland market does not intend to rely solely on capacity and price, but rather to establish a more recognizable value advantage through brand, service, and network efficiency. In Cathay’s view, passengers choose it not just to make a journey from point A to point B, but to have a memorable travel experience.

True localization ultimately relies on people and culture.

However, to truly root this growth, it is not enough to rely solely on routes, products, and organizational advancement; it ultimately needs to focus on people.

Currently, Cathay Pacific Group has over 33,000 employees, of which 4,000 are based in mainland China, including about 800 mainland cabin crew. Every Cathay flight is equipped with at least one crew member who can fluently speak Mandarin. For an airline that has long excelled in internationalization, such a configuration change is itself a reflection of its deepening localized operations.

Cheung Ka-Cho stated that Cathay is not only recruiting but also continuously investing in talent development. In 2026, the group plans to recruit about 3,000 employees globally, with the first recruitment event this year being held in Beijing. At the same time, the group is collaborating with institutions such as the Civil Aviation Flight University of China to establish a professional talent pipeline in the mainland, ranging from trainee pilots to aircraft maintenance engineers.

For Cathay, which has over 30,000 employees with highly diverse cultural backgrounds, how to align employees from different backgrounds towards a unified service direction will determine whether this airline can truly transform diversity into operational capability.

Cathay has a diverse employee team.

Around this point, Cathay has proposed a corporate culture philosophy of “thoughtful planning, actively seeking progress, and doing our best.” In Cheung Ka-Cho’s view, this is not an abstract slogan but a set of guiding standards for employees to understand customer needs and handle service details. Starting in 2024, all newly hired foreign cabin crew will participate in Chinese cultural training to better understand the expression styles and service expectations of mainland travelers.

Only when the talent structure, service logic, and cultural understanding are truly embedded within the local context can growth in the mainland not merely be about scale expansion but transform into deeper operational capabilities.

Behind APEC: Cathay’s global connectivity value.

Since joining the company as a management trainee in 1992, Cheung Ka-Cho has worked in various markets including Indonesia, Vietnam, Turkey, and mainland China. It is precisely due to such cross-market experience that he has a long-term perspective on the relationship between the aviation industry and regional economies.

“In any region, the prosperity of the aviation industry is mutually reinforcing with local economic and livelihood development,” he said.

From this perspective, the 2026 APEC summit to be held in Shenzhen is not merely a transportation task for a conference.

APEC has 21 member economies, covering about half of the world’s GDP and nearly 3 billion people, serving as an important platform for economic and trade cooperation in the Asia-Pacific region. For the aviation industry, this represents both transportation demand and an important opportunity to connect global networks.

In Cheung Ka-Cho’s view, Cathay’s role is not just that of a carrier but also an important bridge connecting China with the world.

On one hand, Hong Kong International Airport, as an international aviation hub, will provide an efficient transfer network for global conference attendees; on the other hand, Shenzhen Shekou Cruise Homeport will become an important “boutique gateway” for Cathay in the Greater Bay Area. Through dedicated check-in counters, professional service teams, and lounges, Cathay is exploring a smoother sea-air intermodal transportation model, enabling travelers to enjoy more convenient connections between Shenzhen and Hong Kong.

Cathay has established dedicated check-in counters at Shenzhen Shekou Cruise Homeport.

If Hong Kong’s hub provides the main channel for “global access to China,” then Shekou represents Cathay’s exploration of extending this connectivity to the “doorstep” of mainland China.

Conclusion: True growth is not just faster, but steadier.

For an airline with an 80-year history, three consecutive years of profit are certainly commendable; but what more often determines future development is the choices made at the peak.

In this sense, Cathay’s current adjustments are not because growth has peaked, but because it recognizes that sustainable growth must be built on a more efficient organization, a more resilient cost structure, deeper localization, and a clearer differentiated positioning.

Therefore, it emphasizes improving cost efficiency and organizational resilience while continuing to invest heavily in mainland China, products, services, and talent development.

This growth trajectory may not be the most dazzling, but it is most likely to run deeper, more steadily, and for a longer term.

Image source: Provided by the brand.