Cathay Pacific Shares Fall Nearly 10% on Fare, Cargo Concerns

Cathay Pacific Airways experienced a sharp decline in its share price, dropping nearly 10% to the lowest level since early July 2025, following a warning of declining airfares and ongoing challenges at its budget carrier HK Express. Despite a 1% increase in first-half profit to HK$3.65 billion driven by strong passenger numbers, lower fuel prices, and stable cargo performance, passenger yields fell significantly—12.3% for the mainline operations and 21.6% for HK Express—due to intensified competition and increased seat capacity in the Asia-Pacific region. HK Express reported a first-half loss of HK$524 million, although Cathay's chairman expressed optimism about the budget airline eventually achieving profitability. The airline is continuing its post-pandemic expansion by ordering 14 additional Boeing 777-9 jets, increasing its total commitment to 35 aircraft with options for seven more. The declining yields, particularly on long-haul routes such as North America where capacity has been increased by 50%, reflect broader regional challenges as airlines compete in a recovering but competitive market. Analysts note the results align with expectations but highlight the budget segment's performance as a key concern amid uncertain cargo market conditions.