Q4 2025 Cathay Pacific Airways Ltd Earnings Call

Speaker #1: Manager Corporate Affairs for CATHAY. Whether you're attending here in person or online, it is a pleasure to see you all and thank you for joining us.

Speaker #1: Introducing our speakers for today: Chief Executive Officer Mr. Ronald Lam, Chief Financial Officer Ms. Rebecca Sharpe, we'll begin the presentations by Ronald and Rebecca, after which we'll open the floor to questions.

Speaker #1: The slides and video recording of today's briefing will be available for download on our Investor Relations page after the briefing. Without further ado, let me invite Ronald to start the presentation.

Speaker #1: Ronald, please.

Speaker #2: Good afternoon. Everyone, very happy to see all of you here. The first part I would just give a brief overview on what we have achieved in the last three years and then how we're going to move forward for the next five years.

Speaker #2: And first of all, I would like to show you this time horizon is the journey we've gone through in recent years starting with 2020 to 2022.

Speaker #2: Of course, those were the COVID-19 years. And during those three years, we fought hard to survive and we did. And we also took the opportunity to transform many aspects of the CATHAY Group so that when the pandemic was over, we could come out stronger than before.

Speaker #2: So survive and thrive. And it was probably the worst three years of our history over the past 80 years. And I think I'm so glad that is now well behind us.

Speaker #2: And after that, 2023 to 2025, another three years where we spent our efforts, we're building from the pandemic as well as investing in the future.

Speaker #2: Thanks to the opening of the three runway systems at the end of 2024, it provided us with a major opportunity for growth. And that's what we did in the last three years.

Speaker #2: And last three years, I would say is was probably the best three years in our CATHAY history. So we had the worst three years and then followed by the best three years.

Speaker #2: So quite a mirror image. And at the airline plus subsidiary level, I would say the loss we make in the worst three years is now fully recovered by the best three years already.

Speaker #2: So I think it's a almost like a perfect mirror image. Now we are into a new era. The next planning period for us is 2026 to 2030, the next five years is how we look at things.

Speaker #2: And 2026 is a new beginning, of course. And we are turning 80 years old. So it's a very special year from that regard. And these five years, there are also two themes.

Speaker #2: We need to sustain our success over the past three years. How can we make it consistent moving forward? How can we sustain our high performance into the next five years is one thing.

Speaker #2: There are certain areas although we've made progress in the last three years, but we are still not where we wanted to be. So there are areas especially when it comes to our customers.

Speaker #2: We still need to improve and further elevate customer experience is the focus areas. So on the one hand, I think we will consolidate over the success we had over the last three years.

Speaker #2: On the other hand, I think we'll make further progress in other areas. So that I think we can climb another peak in the next five years.

Speaker #2: So that's briefly our time history. So first of all, I would like to spend a little bit of time to sum up the last three years, 2023 to 2025.

Speaker #2: And our philosophy by the leadership team is very simple. Everything starts with our team. Because we believe happy team will lead to happy customers.

Speaker #2: And happy customer would then lead to profitable business. This is our leadership philosophy. And therefore, in the last three years, we've spent a lot of time engaging with our team, listening to their concerns, and then put out concrete actions to act on their concerns.

Speaker #2: As you can see, we use one very important indicator to measure our morale and sentiment, which is team net promoter score. And over the last three years, we have moved from the negative zone in 2023, gradually climbed up to the positive zone, and then we ended 2025 at a historical high when it comes to our morale and sentiment.

Speaker #2: And the same has been sustained, by the way, into 2026. I would say whether it's our pilot cabin crew, our frontline ground employees, or office space employees, across all groups, we've seen major uptake in terms of team promoter score.

Speaker #2: Very happy to see that. And with happy team, we've also seen uptake on our customers' satisfaction. We use again a very simple overall indicator, which is customer net promoter score.

Speaker #2: To measure our customer satisfaction. We've made progress. We moved from a positive 20-something to 30-something over the past few years. And each year we have an uptake but we're not satisfied with that.

Speaker #2: Actually, our target is to reach positive 40, we haven't quite done that. And as I mentioned, happy customer is the area we want to further elevate in the coming years.

Speaker #2: Profitable business, this is not just for our shareholders. It is important that we maintain and achieve profitable business so that we can invest back into our own team, as well as invest back into our customers.

Speaker #2: And from that perspective, I think we've done really, really well. Three consecutive years of financial success, consistently over the past three years. From a consolidated profit angle, we make pretty much $10 billion on average in the last three years.

Speaker #2: And this is an unprecedented performance over a three-year period. I think it's the high level of profit as well as the consistency of the profits.

Speaker #2: A golden measure we use to measure our financial success is return on capital employed. And also from that perspective, we have exceeded 10% for three consecutive years.

Speaker #2: In my 30 years career with CATHAY, I've never seen this. And certainly, this is an unprecedented result as well from that perspective. So to sum up, I think from a happy team and profitable business, it's probably the best ever achievement.

Speaker #2: And we need to sustain that. Customer happy customer front, we still have more work to do. Although we have made great progress over the last three years, but we still want to elevate, further elevate experience for our customers in the coming years.

Speaker #2: In terms of we building over the past three years, there's a quantitative perspective. There's also a qualitative perspective. Firstly, we're building quantitatively we have built back our capacity in 2025 already.

Speaker #2: In fact, last year, 2025 was a record year when it comes to us launching new destination. Between CATHAY Pacific and HK Express, we launched 20 new destinations as listed on this slide.

Speaker #2: Last year. And it was a record. And these new destinations have brought us to exceed 100 destinations worldwide at the end of last year.

Speaker #2: And in terms of both passenger and cargo capacity by any measure, whether it's ASK, whether it's frequency, we have exceeded our pre-pandemic level already.

Speaker #2: By end of last year. Equally important we are to we built qualitatively as well. And we have been recognized over the past few years in particular in 2025 by many industry ranking and awards.

Speaker #2: On the CATHAY Pacific front, we've been recognized by SKYTRAX as one of the top three airlines of the world. And in two specific categories, i.e. in-flight entertainment, as well as our economy class, it's been rated the world's best.

Speaker #2: Cargo has been recognized by ATW in two times in the last three years as the cargo operator of the year. So we are firmly a leading air cargo carrier of the world from a quality angle.

Speaker #2: And HK Express has been recognized by airline rating last year as one of the top five low-cost carrier of the world. So we are very happy that across our three airlines, we've been recognized as one of the world-leading ones.

Speaker #2: We won't stop there. I think our vision is very simple. We want whether it's CATHAY Pacific, CATHAY Cargo, HK Express, to be the world's best.

Speaker #2: And we still have more work to do, but I think we are in a good position to build on. Looking forward, the next five years, 2026 to 2030, will be another new era for the CATHAY group.

Speaker #2: And to guide our development in the next five years, among the leadership team, we have refreshed our strategy on the page. And which will guide us forward in the next five years.

Speaker #2: As you can see, our strategy on the page comes in three languages: English, traditional Chinese, and simplified Chinese. This is a reflection of our unique position, deep roots in Hong Kong, proudly part of China, connecting the world.

Speaker #2: We are Hong Kong. We are part of China. And we are very also very international. So this is our internally what we call a tripod position.

Speaker #2: And our overall CATHAY group vision for the next five years is that we want to become our customers' most loved service brand. We are not just comparing ourselves with other airlines.

Speaker #2: We want to be able to compare us with any service brand that our customers get into touch with. And we want to be among their most loved service brand.

Speaker #2: And across the four lines of business, as I mentioned, in turn, we want to be the world's best. CATHAY Pacific, we want to become the world's best premium airline.

Speaker #2: We are now world's top three already. And then CATHAY Cargo, we want to keep it that way, that we are the world's best air cargo carrier.

Speaker #2: For HK Express, our ambition is to become Asia's best LCC, low-cost carrier. And for CATHAY Lifestyle, we want to be the world's best premium travel lifestyle brand.

Speaker #2: Very ambitious target, but as shown in the last few years, we are making good progress. And we are on track in moving towards this vision in the coming years.

Speaker #2: The leadership philosophy I explained for the last three years will continue into the next five years. This philosophy has proven to be sound and practical.

Speaker #2: We will always focus on our team first. And once our team are motivated, happy, they will make our customers happy. Once the customers are happy, they're more willing to choose us over other choices they might have, which will lead to profitable business.

Speaker #2: And of course, within profitable business, we have work to do to make sure that we have the best revenue efficiency. We have the best cost efficiency.

Speaker #2: And that will continue to be the focus for the next five years. A few highlights in terms of our development for the next few years.

Speaker #2: Starting with our fleet, so this year will be taking delivery of eight aircraft. And they are all belonging to the narrowbody family, A320 and A321neo.

Speaker #2: And then in the coming years, from 2027, we'll be taking quite a few more, such aircraft. And then in 2027, around second half of next year, we'll be taking delivery of our new generation long-haul fleet, 777-9.

Speaker #2: We'll finally arrive. And it will also come with our new generation first-class products on that new fleet. So with the new fleet, we will continue to expand to more long-haul destination and more long-haul frequencies from second half of next year.

Speaker #2: And then come 2028, we'll take delivery both on the freighter side as well as the regional widebody side. So freighter will be taking our first A350 freighter from 2028.

Speaker #2: And then our first A330-900, also known as A330neo aircraft, will also arrive in 2028. Altogether, we have more than 100 new generation aircraft coming our way in the coming years.

Speaker #2: This is part of our 100 billion Hong Kong dollar investments into the future, a majority of our investment will be spent on our fleet, modernizing our fleet.

Speaker #2: Not only that, we'll continue to upgrade our cabin products, which are very important to our customers. So already starting last year, we have been rolling out new cabin products on our 777-300ER.

Speaker #2: With the now world-famous ARIA suite, new business class products as well as our new generation premium economy class products on our 777-300ER fleet. Currently, we have 14 of such aircraft, retrofitted.

Speaker #2: And altogether, we will have 35 of them. So there will be more retrofitted aircraft coming out this year and next year on our 777.

Speaker #2: Later this year, we have another hero product, which will be for our regional fleet, A330-300, also known as A330SEAL. Aircraft will be equipped with brand new business class as well.

Speaker #2: We are calling it ARIA Studio. This is a sister product to ARIA Suite. And this is a lie-flat business class seat for our regional fleet.

Speaker #2: Also, each seat would have direct aisle access because it will be in a one, two, one configuration. So our customers will be will find it very convenient that each seat would be given aisle access.

Speaker #2: So we'll continue to roll out throughout the next two years, starting end of this year. We'll see the first of such retrofitted aircraft. And then next year, as I mentioned, the hero product is our 777-9 first-class cabin.

Speaker #2: We'll be introducing our new generation first-class cabin. For coming with the 777-9 in the second half of next year. So each year, I think we are rolling out a new set of cabin products on different fleets.

Speaker #2: On the ground, we will continue to upgrade our lounges worldwide. And starting with Hong Kong, the wing first lounge has been under renovation for quite a few months.

Speaker #2: And I'm glad to share that. We're going to reopen very soon. In April is the plan that we'll reopen this lounge. And this will be our new generation first-class lounge.

Speaker #2: That our members and customers would have been looking forward to. So I also very excited to see the new lounge myself. Later this year, for the first time ever, we'll be having our own CATHAY PACIFIC flagship lounge in New York, JFK Airport for the first time.

Speaker #2: Again, a very exciting project that I look forward to experiencing the new lounge by myself. On the cargo front, our strategy is to provide value that other providers cannot match.

Speaker #2: Our tagline is that we know how. We ride on our expertise. In shipping special shipments for our customers, whether they are time-sensitive, temperature-sensitive, or handling-sensitive, we are the experts.

Speaker #2: CATHAY Cargo has been recognized as the expert. Within the industry in handling such kind of special cargo that requires special skill arrangement. We also want to excel on our digital leadership for CATHAY Cargo.

Speaker #2: There are different initiatives to improve customer experience, operational efficiency, using digital technology within cargo. Our lifestyle business will continue to focus on two areas.

Speaker #2: Our mileage, sales, business, as well as product sales. Our mileage sales Asia miles currency has been very popular in Hong Kong. And in Taiwan, for example.

Speaker #2: And our focus moving forward is to strengthen Asia miles presence in the Chinese mainland, in particular the Greater Bay Area cities. On the product business side, we will focus on CATHAY Sharpe, CATHAY Holiday, as two very important pillars.

Speaker #2: So taking the chance of the ATIF anniversary will be launching many special edition CATHAY branded merchandise. So I think some of you would have seen it outside on display.

Speaker #2: So very exciting year for us. So speaking of ATIF anniversary, I have a short video to share with you, which features our special livery aircraft, what we call lattice sleeve sandwich aircraft.

Speaker #2: We have two of such aircraft. One on the passenger side using our A350 aircraft. And one on the cargo side using our 747 freighter.

Speaker #2: So enjoy the video. How many of you would have seen those two aircraft? No? OK. You'll be lucky to see them because they've been flying busy flying through the world.

Speaker #2: And I think many, many pictures and social media posts have been created because of them over the last two months. And not only that, those two aircraft are more looking back, to celebrate our heritage and history.

Speaker #2: This Monday, we've unveiled a more future-looking aircraft with what we call the Spirit of Hong Kong, with a special Hong Kong artist design artwork on this plane.

Speaker #2: And it's been flying across the world to promote Hong Kong arts and culture as well as the Spirit of Hong Kong. And this one is the fifth generation Spirit of Hong Kong aircraft already.

Speaker #2: The first one we introduced back in 1997 during the handover. And then since then, this is the fifth generation. Starting March, we're also launching vintage uniform show on our aircraft.

Speaker #2: So chances are when you take our flights this month onwards until the end of the year, you will spot some of our cabin crew in vintage uniform.

Speaker #2: And also across the airport, we will have some of our frontline employees wearing these vintage uniform from the past many decades. Last but not the least, as I mentioned on the lifestyle side, we're also launching many new and creative CATHAY branded merchandise to celebrate ATIF anniversary.

Speaker #2: So that concludes my presentation. And let me pass the time to our CFO, Rebecca, to walk you through the numbers. Thank you. Thank you, Ronald.

Speaker #2: And good afternoon, everyone. I have to say, I was remembering that the very first analyst briefing I did, I was talking about double-digit losses.

Speaker #2: So it's really exciting to me today to be talking for the first time about double-digit profits. So and as Ronald has explained off the back of three consecutive profitable years, so as normal, I will follow a similar presentation that we've done before.

Speaker #2: I'll talk a bit about the financial highlights. And then something about the some of the key business statistics, more of the operational statistics. And then a bit about Outlook to wrap up before we move to Q&A with Ronald and myself.

Speaker #2: So let's get started. This slide you will be familiar with it. We've got some of the key six sort of top numbers that we refer to.

Speaker #2: I will cover some of these through the course of the presentation. So the one I just want to draw attention to here is around our revenue.

Speaker #2: So at $116.8, almost $117 billion, fascinating fact for you. This is the highest revenue number we've ever generated in our 80-year history. So this was a real milestone for us in 2025.

Speaker #2: This slide covers the consolidated profit. But we've split it out into a number of levels. So you can see some of the buildup. And looking back over the three years to 2025, you can see there we had a small non-recurring item in there, which was an impairment provision on some fixed assets in our subsidiaries that we've been able to write back based on the better performance.

Speaker #2: And the other line that you can see that doesn't feature on other slides is the improvement in the associates line. So that also improves to contribute to our bottom line number of $10.8 billion Hong Kong dollars for the year.

Speaker #2: This chart is a map of the 2024 consolidated number of $9.9 and how we get to the consolidated number for 2025. And of course, the big drivers you can see on here are the key things that affected our 2025 number.

Speaker #2: The story effectively of much higher capacity. So you'll see the more detail later. But around 26% increase in capacity. And that drove the big green bar there in terms of revenue, but also the larger red bar further to the right because, of course, we incurred greater costs in order to support this higher operations.

Speaker #2: But equally, the other big element in there is the yields going down. As we expected, we talked about this back in August. We expected yields to continue to normalize and they did.

Speaker #2: That was an impact of about 10% over the course of the full year. Fuel. This is a bit of a hot topic at the moment.

Speaker #2: I'm sure you'll have questions for us on this later. But our fuel costs increased, of course, because we increased the capacity during the course of the year.

Speaker #2: But that was offset because actually, to some degree, because the fuel price last year for the whole '25 was actually around 9% less than it was in 2024.

Speaker #2: So we got the benefit of a lower fuel price. But of course, higher fuel costs because we were operating greater capacity. But maybe at this point, you can see on the right-hand side the chart where we set out our hedging.

Speaker #2: So I think you're all familiar with the fact that we hedge our fuel. And so you can see that for 2026, we've got about 30% of our fuel hedged.

Speaker #2: At around or just under $70 a barrel. This is hedged on crude oil at a crude oil hedges. Rather than jet fuel. And maybe just to talk about jet fuel briefly because, of course, that is the large number or the elephant in the room, perhaps.

Speaker #2: I think on average, since the conflict in the Middle East started, the jet fuel price has been around $160.7 US dollars. Now, if I look at that compared to the average jet fuel price for January and February, it's almost double.

Speaker #2: So you can see the step change that we've seen in jet fuel just over the last sort of 10 days. It's dramatic increase. And so our hedging is on crude oil, rather than jet fuel.

Speaker #2: And therefore, whilst we do have some protection from that hedging, obviously, it's not protecting against the jet fuel price in totality because that refiners difference or the cost of getting the fuel from crude to jet, the refineries are charging a huge amount.

Speaker #2: The crack spread and that is significant at the moment. Our fuel hedging policy, though, does stay in place. We're continuing to we operated at the same way as we have done for the past number of years.

Speaker #2: During 2025, and it remains in place today. I know that's another question you always ask me. So I'll answer it now. In terms of costs overall, this slide is setting out our cost per ATK.

Speaker #2: You can see including an excluding fuel. Of course, our costs are chart on the left. You can see them going up because we have increased our capacity.

Speaker #2: But the trend as a result of economies of scale is our cost per ATK coming down. So it's around 2.4% reduction if I exclude fuel between 2024 and 2025.

Speaker #2: So again, that we talked about that, I think, previously. That was as expected. Financing, of course, this is a key number for us too.

Speaker #2: Chart on the left is telling you what the total cost of our financing was or a net number. And you can see that in 2025, that was a similar level to 2023.

Speaker #2: And the reason for that going down was a combination of two factors. Of course, we saw the interest rates start to go down in 2025.

Speaker #2: But also, we off the back of generating profits in '23, '24, we were able to pay off some of the debt that we had.

Speaker #2: And therefore, we're not borrowing at such high levels. And therefore, that brings our financing charges down, of course. Chart on the right shows you the split between our borrowings in terms of fixed versus floating.

Speaker #2: And you can see, I think I've talked about this before as well, we typically try to have around 50% in terms of fixed versus floating.

Speaker #2: We hover sort of around that number. You can see it was 48 versus 52 for 2025. And that strong profit position, you can see it drove into the cash flow numbers.

Speaker #2: So this slide is mapping our liquidity at the end of 2024, around $19 billion. And mapping it through to the '25.4 billion that we had at the end of 2025.

Speaker #2: And the big green bar that you can see, of course, is the cash generation from our operations we were able, therefore, to use it to invest.

Speaker #2: So some of the products that Ronald was talking about earlier, the aircraft, we've obviously, you have to pay some money upfront for some of those.

Speaker #2: We're starting to make investments. So around $9 billion spent there. And we were also able to repay some of our financing as a result of the cash generation.

Speaker #2: Some funding we refinanced. You can see new financing coming in. Some we repaid. And we ended up with a balance of $25.4 billion at the end of the year.

Speaker #2: Now, you might say to me, that's quite a big difference from the number at the start of the year. And that is shown on here too.

Speaker #2: The reason for that, I'm sure you're all aware that we bought back the Qatar shareholding last month. It completed. And that cost us around $7 billion Hong Kong dollars.

Speaker #2: And so towards the end of last year, we were building up funds to be able to fund that buyback. So hence the number at the end of 2025 was somewhat elevated as a result.

Speaker #2: The end of February, of course, it came down because we paid for it. The other thing you can see on this chart is our gearing number.

Speaker #2: And that was down to 0.6 at the end of last year. So a healthy position. And you the other thing, this reflects too is the debt level.

Speaker #2: So you can see also as I mentioned earlier, that has come down too. One of the elements of that, you may remember the end of 2024, we bought back a large portion, around 68% of the convertible bond.

Speaker #2: The remainder of that bond, around 2.1 billion, was converted during the course of 2025. So it moved out of our debt balance and into our share capital.

Speaker #2: And hence brought the debt balance down too. Finally, on this section, I haven't talked about it yet. I should have done this at the start.

Speaker #2: The dividend. So the second interim dividend that we've announced today of 64 cents, so added to the 20 cents we paid in October, made a total or makes a total of 84 cents dividend per share.

Speaker #2: You can see here and as we mentioned the slide, although it's small writing, so you probably can't read it, but our policy is to pay approximately 50% of our profit after tax adjusting for exceptional non-cash items.

Speaker #2: And of course, taking into account the environment at the time. But yes, we've announced today a second interim dividend of 64 cents per share.

Speaker #2: And of course, that's a little bit higher because following the buyback, there's less shares in circulation. So the 50% number has a bit further to or more on a per share basis.

Speaker #1: At the end of 2024, we bought back a large portion, around 68%, of the convertible bond. The remainder of that bond, around $2.1 billion, was converted during the course of 2025.

[CFO] (Cathay Pacific Airways): the end of 2024, we bought back a large portion, around 68% of the convertible bond. The remainder of that bond, around HKD 2.1 billion, was converted during the course of 2025. It moved out of our debt balance and into our share capital, and hence brought the debt balance down too. Finally, on this section, I haven't talked about it yet. I should have done this at the start. The dividend. The second interim dividend that we've announced today of HKD 0.64, added to the HKD 0.20 we paid in October, makes a total HKD 0.84 dividend per share. You can see here, and as we mentioned the slide, although it's small writing, you probably can't read it.

Rebecca Sharpe: the end of 2024, we bought back a large portion, around 68% of the convertible bond. The remainder of that bond, around HKD 2.1 billion, was converted during the course of 2025. It moved out of our debt balance and into our share capital, and hence brought the debt balance down too. Finally, on this section, I haven't talked about it yet. I should have done this at the start. The dividend. The second interim dividend that we've announced today of HKD 0.64, added to the HKD 0.20 we paid in October, makes a total HKD 0.84 dividend per share. You can see here, and as we mentioned the slide, although it's small writing, you probably can't read it.

Speaker #2: So that's very quick sort of wrap-up of the financial numbers. If I move perhaps more into the business elements, in terms of CATHAY PACIFIC, this is our premium travel airline.

Speaker #1: So it moved out of our debt balance and into our share capital, and hence brought the debt balance down too. Finally, on this section, I haven't talked about it yet.

Speaker #2: This slide sets out the key statistics. So here you can see the story that I mentioned earlier in terms of our revenue has gone up by almost 16%.

Speaker #1: I should have done this at the start. The dividend, so the second interim dividend that we've announced today, of 64 cents, so added to the 20 cents we paid in October, made a total of or makes a total of 84 cents dividend per share.

Speaker #2: But capacity went up by 26%. And so that's where you see the impact coming through on the yield going down by the 10%. As those two parts of the equation intersect.

Speaker #1: You can see here, and as we mentioned in the slide—although it's small writing, so you probably can't read it—but our policy is to pay approximately 50% of our profit after tax, adjusting for exceptional non-cash items, and of course taking into account the environment at the time. But yes, we've announced today a second interim dividend of 64 cents per share.

Speaker #2: So we continue to add more passenger flights and destinations. As we grew that capacity and the other thing that was slightly stronger in 2025 compared to 2024 was the load factors.

[CFO] (Cathay Pacific Airways): Our policy is to pay approximately 50% of our profit after tax, adjusting for exceptional non-cash items and, of course, taking into account the environment at the time. Yes, we've announced today a second interim dividend of HKD 0.64 per share. Of course, that's a little bit higher because following the buyback, there's less shares in circulation. The 50% number has a bit further to go or more per on a per share basis. That's a very quick sort of wrap up of the financial numbers. If I move perhaps more into the business elements. In terms of Cathay Pacific, this is our premium travel airline. This slide sets out the key statistics.

Rebecca Sharpe: Our policy is to pay approximately 50% of our profit after tax, adjusting for exceptional non-cash items and, of course, taking into account the environment at the time. Yes, we've announced today a second interim dividend of HKD 0.64 per share. Of course, that's a little bit higher because following the buyback, there's less shares in circulation. The 50% number has a bit further to go or more per on a per share basis. That's a very quick sort of wrap up of the financial numbers. If I move perhaps more into the business elements. In terms of Cathay Pacific, this is our premium travel airline. This slide sets out the key statistics.

Speaker #2: And you'll can see those more clearly on this page. So they're in the middle chart. You can see that progressive increase over the last four halves of our load factors continuing up.

Speaker #1: And of course, that's a little bit higher because following the buyback, there's fewer shares in circulation. So the 50% number has a bit further to go, or more, on a per-share basis.

Speaker #2: So this chart is trying to show you by each half of 2024 and 2025, the numbers in terms of capacity, load factor, and yield.

Speaker #1: So that's a very quick sort of wrap-up of the financial numbers. If I move perhaps more into the business elements—in terms of Cathay Pacific, this is our premium travel airline.

Speaker #2: As I say, load factor, you can see that upward trajectory. Capacity, of course, you all know we've been gradually increasing that over the past two years.

Speaker #2: And yield, on the other side, again, we've talked about it a lot. The normalization of yield, the slightly interesting thing in 2025 was the second half yield managed to stay at a similar level to the first half.

Speaker #1: This slide sets out the key statistics. So here you can see the story that I mentioned earlier in terms of our revenue has gone up by almost 16%.

[CFO] (Cathay Pacific Airways): Here you can see the story that I mentioned earlier in terms of our revenue's gone up by almost 16%, but capacity went up by 26%. That's where you see the impact coming through on the yield going down by the 10%, as those two parts of the equation intersect. We continue to add more passenger flights and destinations as we grew that capacity. The other thing that was slightly stronger in 2025 compared to 2024 was the load factors. As you can see those more clearly on this page. They're in the middle chart. You can see that progressive increase over the last four halves of our load factors continuing up.

Rebecca Sharpe: Here you can see the story that I mentioned earlier in terms of our revenue's gone up by almost 16%, but capacity went up by 26%. That's where you see the impact coming through on the yield going down by the 10%, as those two parts of the equation intersect. We continue to add more passenger flights and destinations as we grew that capacity. The other thing that was slightly stronger in 2025 compared to 2024 was the load factors. As you can see those more clearly on this page. They're in the middle chart. You can see that progressive increase over the last four halves of our load factors continuing up.

Speaker #2: So you can see that sort of tailing off of the yield normalization. Moving on to CATHAY CARGO, our second line of business. Again, same slide as I've got for the premium travel.

Speaker #1: But capacity went up by 26%, and so that's where you see the impact coming through on the yield going down by 10%, as those two parts of the equation intersect.

Speaker #1: So, we continued to add more passenger flights and destinations as we grew that capacity, and the other thing that was slightly stronger in 2025 compared to 2024 was the load factors.

Speaker #2: We've got the cargo revenue. It's a very similar level to the level it was in 2024. Their capacity went up too, not by as much as the passenger side of the business, but the reason for the capacity increase in cargo is the bellies of our passenger planes.

Speaker #1: And as you can see, those are more clearly shown on this page. So they're in the middle chart. You can see that progressive increase over the last four halves, of our load factors continuing up.

Speaker #2: There was not additional capacity on the freighters, but it was in the bellies of our passenger planes. They also saw some yield normalization, but not to such a strong or large amount as on the passenger side of the business.

Speaker #1: So this chart is trying to show you, by each half of 2024 and 2025, the numbers in terms of capacity, load factor, and yield. As I say, load factor—you can see that upward trajectory.

[CFO] (Cathay Pacific Airways): This chart is trying to show you by each half of 2024 and 2025, the numbers in terms of capacity, load factor, and yield. As I say, load factor, you can see that upward trajectory. Capacity, of course, you all know we've been gradually increasing that over the past two years. Yield on the other side, again, we've talked about it a lot, the normalization of yield. The slightly interesting thing in 2025 was the second half yield managed to stay at a similar level to the first half. You can see that sort of tailing off of the yield normalization. Moving on to Cathay Cargo, our second line of business. Again, same slide as I've got for the premium travel. We've got the cargo revenue at a very similar level to the level it was in 2024.

Rebecca Sharpe: This chart is trying to show you by each half of 2024 and 2025, the numbers in terms of capacity, load factor, and yield. As I say, load factor, you can see that upward trajectory. Capacity, of course, you all know we've been gradually increasing that over the past two years. Yield on the other side, again, we've talked about it a lot, the normalization of yield. The slightly interesting thing in 2025 was the second half yield managed to stay at a similar level to the first half. You can see that sort of tailing off of the yield normalization. Moving on to Cathay Cargo, our second line of business. Again, same slide as I've got for the premium travel. We've got the cargo revenue at a very similar level to the level it was in 2024.

Speaker #2: And their load factor stayed very similar year on year. And then this again, the same chart as we had for the travel business. You can see each half year.

Speaker #1: Capacity, of course, you all know we’ve been gradually increasing that over the past two years. And yield, on the other side, again, we’ve talked about it a lot, the normalization of yield. There’s a slightly interesting thing—in 2025, the second half yield managed to stay at a similar level to the first half.

Speaker #2: Numbers are somewhat different to the passenger part of the business. But so you can see that sort of steady load factor across the two years.

Speaker #2: Yield, first half, second half, we see that the second half, of course, stronger. And the big difference in the capacity first half, second half for 2025 was in the first half of the year.

Speaker #1: So you can see that sort of tailing off of the yield normalization. Moving on to Cathay Cargo, our second line of business. Again, same slide as I've got for the premium travel.

Speaker #2: We had some of our freighters for extended maintenance. So we didn't have quite as much capacity on the freighters themselves flying. But that was back available in the second half of 2025.

Speaker #1: We've got the cargo revenue at a very similar level to the level it was in 2024. Their capacity went up too—not by as much as the passenger side of the business—but the reason for the capacity increase in cargo is the bellies of our passenger planes.

Speaker #2: And you can see that coming through there. I remember that we talked in August about what was the sort of peak going to be like for the cargo business because we often talk about the fact that the second half of the year for cargo you have a sort of peak in Q4 as you get to Q4.

[CFO] (Cathay Pacific Airways): Their capacity went up too, not by as much as the passenger side of the business, but the reason for the capacity increase in cargo is the bellies of our passenger planes. There was not additional capacity on the freighters, but it was in the bellies of our passenger planes. They also saw some yield normalization, but not such a strong or large amount as on the passenger side of the business. Their load factors stayed very similar year-over-year. Then this again, the same chart as we had for the travel business. You can see each half-year numbers are somewhat different to the passenger part of the business, but so you can see that sort of steady load factor across the two years. Yield first half, second half, we see that the second half, of course, stronger.

Rebecca Sharpe: Their capacity went up too, not by as much as the passenger side of the business, but the reason for the capacity increase in cargo is the bellies of our passenger planes. There was not additional capacity on the freighters, but it was in the bellies of our passenger planes. They also saw some yield normalization, but not such a strong or large amount as on the passenger side of the business. Their load factors stayed very similar year-over-year. Then this again, the same chart as we had for the travel business. You can see each half-year numbers are somewhat different to the passenger part of the business, but so you can see that sort of steady load factor across the two years. Yield first half, second half, we see that the second half, of course, stronger.

Speaker #1: There was not additional capacity on the freighters, but it was in the bellies of our passenger planes. They also saw some yield normalization, but not to such a strong or large amount as on the passenger side of the business.

Speaker #2: And we wondered whether because of the sort of tariff situation and everybody was wondering, is all the cargo being pulled forward in order because people were sort of stocking up, would there be a peak of the same level?

Speaker #2: I would say the cargo peak for CATHAY CARGO was a strong peak in Q4 of last year. Then our lifestyle business. I won't touch on that.

Speaker #1: And their load factor stayed very similar year on year. And then this again—this is the same chart as we had for the travel business. You can see each half year.

Speaker #2: Ronald's elaborated earlier. Moving on to HK Express. So this is our fourth line of business. Now, their capacity dramatically increased again last year. More than 30% during the course of the year.

Speaker #1: Numbers are somewhat different to the passenger part of the business, but so you can see that sort of steady load factor across the two years.

Speaker #1: Yield, first half, second half—we see that the second half, of course, is stronger. And the big difference in the capacity first half, second half for 2025 was in the first half of the year, we had some of our freighters in for extended maintenance.

[CFO] (Cathay Pacific Airways): The big difference in the capacity first half, second half of 2025 was in the first half of the year. We had some of our freighters for extended maintenance. We didn't have quite as much capacity on the freighters themselves flying. That was back available in the second half of 2025, and you can see that coming through there. I remember that we talked in August about what was the sort of peak going to be like for the cargo business, because we often talk about the fact that the second half of the year for cargo, you have a sort of peak in Q4 as you get to Q4.

Speaker #2: And you remember the prior year, it had already increased by around 46%. So they've had a really strong capacity increase over the past couple of years.

Rebecca Sharpe: The big difference in the capacity first half, second half of 2025 was in the first half of the year. We had some of our freighters for extended maintenance. We didn't have quite as much capacity on the freighters themselves flying. That was back available in the second half of 2025, and you can see that coming through there. I remember that we talked in August about what was the sort of peak going to be like for the cargo business, because we often talk about the fact that the second half of the year for cargo, you have a sort of peak in Q4 as you get to Q4.

Speaker #1: So, we didn't have quite as much capacity on the freighters themselves flying, but that was back available in the second half of 2025. And you can see that coming through there.

Speaker #2: They launched more destinations. I think they're flying to around 37 by the end of last year. And operating around 44 aircraft at the end of the year.

Speaker #1: I remember that we talked in August about what the sort of peak was going to be like for the cargo business, because we often talk about the fact that the second half of the year for cargo, you have a sort of peak in Q4 as you get to Q4.

Speaker #2: In terms of the numbers, you'll have read in the announcement, I'm sure, that they were loss-making in 2025. You can see that capacity increase of nearly 32%.

Speaker #1: And we wondered whether, because of the sort of tariff situation—and everybody was wondering—is all the cargo being pulled forward, because people were sort of stocking up? Would there be a peak at the same level?

[CFO] (Cathay Pacific Airways): We wondered whether, because of the sort of tariff situation and everybody was wondering, is all the cargo being pulled forward in order because people were sort of stocking up, would there be a peak at the same level? I would say the cargo peak for Cathay Cargo was a strong peak in Q4 of last year. Our lifestyle business. I won't touch on that. Ronald elaborated earlier. Moving on to HK Express. This is our fourth line of business. Now, their capacity dramatically increased again last year, more than 30% during the course of the year. You remember the prior year, it had already increased by around 46%. They've had a really strong capacity increase over the past couple of years. They launched more destinations.

Speaker #2: But the revenue only goes up by 7%. Impacted by yield going down and load factor going down. And they were affected by a number of things.

Rebecca Sharpe: We wondered whether, because of the sort of tariff situation and everybody was wondering, is all the cargo being pulled forward in order because people were sort of stocking up, would there be a peak at the same level? I would say the cargo peak for Cathay Cargo was a strong peak in Q4 of last year. Our lifestyle business. I won't touch on that. Ronald elaborated earlier. Moving on to HK Express. This is our fourth line of business. Now, their capacity dramatically increased again last year, more than 30% during the course of the year. You remember the prior year, it had already increased by around 46%. They've had a really strong capacity increase over the past couple of years. They launched more destinations.

Speaker #2: But the most significant and again, we did talk about this in August was the changes in customer preference. So you remember we talked quite a lot about Japan.

Speaker #1: I would say the cargo peak for Cathay Cargo was a strong peak in Q4 of last year. Then our Lifestyle business, I won't touch on that.

Speaker #2: Back in the summer, with the earthquake rumor, and although that sounds a bit sort of unusual perhaps, but it had a big impact on the demand for our flights to Japan on HK Express in July and August particularly.

Speaker #1: Ronald elaborated earlier. Moving on to HK Express—so this is our fourth line of business. Their capacity dramatically increased again last year, more than 30% during the course of the year.

Speaker #2: So that, of course, came through in our second half number. The other thing is their increasing their capacity and they're adding new destinations. Some of these are destinations we've not flown to before.

Speaker #1: And you remember the prior year, it had already increased by around 46%. So they've had a really strong capacity increase over the past couple of years.

Speaker #2: There's not been an airline to fly between Hong Kong and that destination. So these new destinations take time to mature. So we are making a bit of an investment in raising awareness and creating new destinations.

Speaker #1: They launched more destinations. I think they're flying to around 37 by the end of last year, and operating around 44 aircraft at the end of the year.

[CFO] (Cathay Pacific Airways): I think they're flying to around 37 by the end of last year and operating around 44 aircraft at the end of the year. In terms of the numbers, you'll have read in the announcement, I'm sure that they were loss-making in 2025. There you can see that capacity increase of nearly 32%, but the revenue only goes up by 7%. Impacted by yield going down and load factor going down. They were affected by a number of things, but the most significant, and again, we did talk about this in August, was the changes in customer preference.

Rebecca Sharpe: I think they're flying to around 37 by the end of last year and operating around 44 aircraft at the end of the year. In terms of the numbers, you'll have read in the announcement, I'm sure that they were loss-making in 2025. There you can see that capacity increase of nearly 32%, but the revenue only goes up by 7%. Impacted by yield going down and load factor going down. They were affected by a number of things, but the most significant, and again, we did talk about this in August, was the changes in customer preference.

Speaker #2: And that will take some time to mature. Then the industry-wide Pratt & Whitney issue continues on. I think we had about five aircraft on ground of HK Express during the course of last year, which is similar to the previous year.

Speaker #1: In terms of the numbers, you'll have read in the announcement, I'm sure, that they were loss-making. In 2025, you can see that capacity increases by nearly 32%, but the revenue only goes up by 7%.

Speaker #2: As the Pratt & Whitney engines are not able to be repaired as yet. So that will continue on. But although these numbers perhaps look a bit negative, shall we say, I have to say the fundamentals of HK Express continue to improve.

Speaker #1: Impacted by yield going down and load factor going down. And they were affected by a number of things, but the most significant—and again, we did talk about this in August—was the changes in customer preference.

Speaker #2: So things like their utilization of aircraft continue to go up. Their cost efficiencies are continuing to improve. Their on-time performance is strong. So from a sort of business, from a group perspective, we're confident in their future trajectory and we do see a path to profitability for them off the back of these strong fundamentals.

Speaker #1: So, you remember we talked quite a lot about Japan back in the summer, with the earthquake rumor, and although that sounds a bit sort of unusual, perhaps, it had a big impact on the demand for our flights to Japan on HK Express in July and August, particularly.

[CFO] (Cathay Pacific Airways): You remember we talked quite a lot about Japan back in the summer with the earthquake rumor, and although that sounds a bit sort of unusual perhaps, but it had a big impact on the demand for our flights to Japan on HK Express in July and August particularly. That of course came through in our second half number. The other thing is they're increasing their capacity and they're adding new destinations. Some of these are destinations we've not flown to before. There's not been an airline fly between Hong Kong and that destination. These new destinations take time to mature. We are making a bit of an investment in raising awareness and creating new destinations, and that will take some time to mature. The industry-wide Pratt & Whitney issue continues on.

Rebecca Sharpe: You remember we talked quite a lot about Japan back in the summer with the earthquake rumor, and although that sounds a bit sort of unusual perhaps, but it had a big impact on the demand for our flights to Japan on HK Express in July and August particularly. That of course came through in our second half number. The other thing is they're increasing their capacity and they're adding new destinations. Some of these are destinations we've not flown to before. There's not been an airline fly between Hong Kong and that destination. These new destinations take time to mature. We are making a bit of an investment in raising awareness and creating new destinations, and that will take some time to mature. The industry-wide Pratt & Whitney issue continues on.

Speaker #1: So that, of course, came through in our second-half number. The other thing is they're increasing their capacity, and they're adding new destinations. Some of these are destinations not flown to before.

Speaker #2: In terms of sustainability, just to briefly finish off on this section, you know this is important to us. It's one of our key areas of focus.

Speaker #1: There hasn't been an airline to fly between Hong Kong and that destination, so these new destinations take time to mature. We are making a bit of an investment in raising awareness and creating new destinations.

Speaker #2: In terms of sustainability, leadership for the group as a whole. Our sustainability report will be published next month alongside our annual report. There's lots and lots of interesting information and facts for you in there.

Speaker #1: And that will take some time to mature. Then it continues on. I think we had about five aircraft on ground for HK Express during the course of last year, which is similar to the previous year.

Speaker #2: To help you with your analysis. The two key areas for focus as we've talked about before are climate change and the circular economy. Climate change because, of course, this is financially material to us as a group.

[CFO] (Cathay Pacific Airways): I think we had about 5 aircraft on ground of HK Express during the course of last year, which is similar to the previous year as the Pratt & Whitney engines are not able to be repaired as yet. That will continue on. Although these numbers perhaps look a bit negative, shall we say, I have to say the fundamentals of HK Express continue to improve. Things like their utilization of aircraft continue to go up. Their cost efficiencies are continuing to improve. Their on-time performance is strong. From a business, from a group perspective, we're confident in their future trajectory. We do see a path to profitability for them off the back of these strong fundamentals. In terms of sustainability, just to briefly finish off on this section, and you know this is important to us.

Rebecca Sharpe: I think we had about 5 aircraft on ground of HK Express during the course of last year, which is similar to the previous year as the Pratt & Whitney engines are not able to be repaired as yet. That will continue on. Although these numbers perhaps look a bit negative, shall we say, I have to say the fundamentals of HK Express continue to improve. Things like their utilization of aircraft continue to go up. Their cost efficiencies are continuing to improve. Their on-time performance is strong. From a business, from a group perspective, we're confident in their future trajectory. We do see a path to profitability for them off the back of these strong fundamentals. In terms of sustainability, just to briefly finish off on this section, and you know this is important to us.

Speaker #1: As the Pratt & Whitney engines are not able to be repaired as yet, so that will continue on. But although these numbers perhaps look a bit negative, shall we say, I have to say the fundamentals of HK Express continue to improve.

Speaker #2: Circular economy because this is very important to our customers. We have lots of initiatives underway in both these areas. If you've been on some of our flights, maybe you've heard our cabin crew asking to collect the plastic bottles back.

Speaker #1: So things like their utilization of aircraft continue to go up. Their cost efficiencies are continuing to improve. Their on-time performance is strong. So from a sort of business, from a group perspective, we're confident in their future trajectory, and we do see a path to profitability for them off the back of these strong fundamentals.

Speaker #2: So we've got lots of different things in order to remote development and improvements in both of these areas. But as I've said before, this is a challenge for the aviation sector.

Speaker #2: And it does need many stakeholders to get involved in order to work our way through this particular challenge. The last but not least, Outlook.

Speaker #1: In terms of sustainability, just to briefly finish off on this section, I think you know this is important to us. It's one of our key areas of focus.

Speaker #2: The first thing I was just going to briefly touch on. And this slide is more for your sort of later reference. You've probably read it in the press statements, etc.

[CFO] (Cathay Pacific Airways): It's one of our key areas of focus in terms of sustainability leadership for the group as a whole. Our sustainability report will be published next month, alongside our annual report. There's lots and lots of interesting information and facts for you in there, to help you with your analysis. The two key areas for focus, as we've talked about before, are climate change and the circular economy. Climate change because of course, this is financially material to us as a group. Circular economy because this is very important to our customers. We have lots of initiatives underway in both these areas. If you've been on some of our flights, maybe you've heard our cabin crew asking to collect the plastic bottles back. We've got lots of different things in order to promote development and improvements in both of these areas.

Rebecca Sharpe: It's one of our key areas of focus in terms of sustainability leadership for the group as a whole. Our sustainability report will be published next month, alongside our annual report. There's lots and lots of interesting information and facts for you in there, to help you with your analysis. The two key areas for focus, as we've talked about before, are climate change and the circular economy. Climate change because of course, this is financially material to us as a group. Circular economy because this is very important to our customers. We have lots of initiatives underway in both these areas. If you've been on some of our flights, maybe you've heard our cabin crew asking to collect the plastic bottles back. We've got lots of different things in order to promote development and improvements in both of these areas.

Speaker #1: Turn to the sustainability leadership for the group as a whole. Our sustainability report will be published next month alongside our annual report. There's lots and lots of interesting information and facts for you in there.

Speaker #2: Our share buyback from Qatar Airways that we completed late last month. As I said before, some of the information in these slides is for your easy reference.

Speaker #2: I don't talk to every single bullet point on them. But yes, this was a good outcome in terms of Qatar asking us if we're interested to buy their shares back and us deciding that this was a way to have an orderly exit for them as an organization.

Speaker #1: To help you with your analysis, the two key areas for focus, as we've talked about before, are climate change and the circular economy.

Speaker #1: Climate change, because of course, this is financially material to us as a group. Economy, because this is very important to our customers.

Speaker #2: And of course, it has improved our earnings per share and the dividend per share as well. But that happened post-year end. In terms of our outlook for our passenger businesses, so we're confident in 2026, subject to Middle East geopolitical challenges at the moment.

Speaker #1: We have lots of initiatives underway in both these areas. If, on some of our flights, maybe you've heard our cabin crew asking to collect the plastic bottles back.

Speaker #1: So we've got lots of different things in order to to promote development and improvements in both of these areas . But as I've said before , this is a challenge for the aviation sector , and it does need many stakeholders to get involved in order to to work our way through this particular challenge .

[CFO] (Cathay Pacific Airways): As I've said before, this is a challenge for the aviation sector, and it does need many stakeholders to get involved in order to work our way through this particular challenge. Last but not least, outlook. The first thing I was just going to briefly touch on, and this slide is more for your sort of later reference. You've probably read it in the press statements, etc. Our share buyback from Qatar Airways that we completed late last month. As I said before, some of the information in these slides is for your easy reference. I don't talk to every single bullet point on them.

Rebecca Sharpe: As I've said before, this is a challenge for the aviation sector, and it does need many stakeholders to get involved in order to work our way through this particular challenge. Last but not least, outlook. The first thing I was just going to briefly touch on, and this slide is more for your sort of later reference. You've probably read it in the press statements, etc. Our share buyback from Qatar Airways that we completed late last month. As I said before, some of the information in these slides is for your easy reference. I don't talk to every single bullet point on them.

Speaker #2: But we're expecting to grow our passenger capacity by around 10% for the year. So this, of course, is quite a bit less than the last couple of years.

Speaker #2: But we, as Ronald already mentioned earlier, we're back to our 100% capacity. So this is sort of moving us beyond that. We do see various challenges of course.

Speaker #1: So last but not least , outlook . The first thing I was just going to briefly touch on , and this slide is more for your sort of later reference .

Speaker #1: You've probably read it in the press statements , etc. . Our share buyback from Qatar Airways that we completed late last month . As I said before , some of the information in these slides is for your easy reference .

Speaker #2: The supply chain continues to be challenged, whether it's new aircraft deliveries, whether it's parts for maintenance. That still does have challenges. And we anticipate they will continue.

Speaker #2: We've got lots of processes and procedures in place to try and mitigate the impact. But it is something that should be flagged as a risk for us going forward.

Speaker #1: I don't talk to every single bullet point on them. But yes, this was a good outcome in terms of Qatar asking us if we're interested to buy their shares back, and us deciding that this was a way to have an orderly exit for them as an organisation.

[CFO] (Cathay Pacific Airways): Yes, this was a good outcome in terms of Qatar asking us if we're interested to buy their shares back and us deciding that this was a way to have an orderly exit for them as an organization. Of course, it has improved our earnings per share and the dividend per share as well. That happened post year-end. In terms of our outlook for our passenger businesses, we're confident in 2026, subject to Middle East geopolitical challenges at the moment. We're expecting to grow our passenger capacity by around 10% for the year. This of course is quite a bit less than the last couple of years. We, as Ronald already mentioned earlier, we're back to our 100% capacity. This is sort of moving us beyond that.

Rebecca Sharpe: Yes, this was a good outcome in terms of Qatar asking us if we're interested to buy their shares back and us deciding that this was a way to have an orderly exit for them as an organization. Of course, it has improved our earnings per share and the dividend per share as well. That happened post year-end. In terms of our outlook for our passenger businesses, we're confident in 2026, subject to Middle East geopolitical challenges at the moment. We're expecting to grow our passenger capacity by around 10% for the year. This of course is quite a bit less than the last couple of years. We, as Ronald already mentioned earlier, we're back to our 100% capacity. This is sort of moving us beyond that.

Speaker #2: And of course, it goes without saying, the current Middle East conflict is a part of sort of some huge level of uncertainty and volatility at the moment.

Speaker #1: And of course, it has improved our earnings per share and the dividend per share as well. But that happened post year-end in terms of our outlook for our passenger businesses.

Speaker #2: And how that plays out is really hard to assess at the moment. In terms of cargo, similar. The cargo flows again, hard to predict or project.

Speaker #2: But as Ronald talked to you earlier, our specializations give us some advantage in certain areas. And our ability to be flexible with our network to move where the demand is coming from has enabled us to have a solid performance in cargo in 2025.

Speaker #1: So, we're confident in 2026, subject to Middle East geopolitical challenges at the moment. But we're expecting to grow our passenger capacity by around 10% for the year.

Speaker #1: So this , of course , is quite a bit less than the last couple of years . But we as Ronald already mentioned earlier , we're back to our hundred percent capacity .

Speaker #2: And we also have these six freighter aircraft delivering in the future. Until then, their increasing capacity on the cargo side will come continue to come from the increased capacity on the passenger aircraft.

Speaker #1: So this is sort of moving us beyond that. We do see various challenges. Of course, the supply chain continues to be challenged.

[CFO] (Cathay Pacific Airways): We do see various challenges. Of course, the supply chain continues to be challenged, whether it's new aircraft deliveries, whether it's parts for maintenance. That still does have challenges, and we anticipate they will continue. We've got lots of processes and procedures in place to try and mitigate the impact, but it is something that should be flagged as a risk for us going forward. Of course, it goes without saying, the current Middle East conflict is a part of, sort of, some huge level of uncertainty and volatility at the moment. How that plays out is really hard to assess at the moment. In terms of cargo, similar. The cargo flows, again, hard to predict or project.

Rebecca Sharpe: We do see various challenges. Of course, the supply chain continues to be challenged, whether it's new aircraft deliveries, whether it's parts for maintenance. That still does have challenges, and we anticipate they will continue. We've got lots of processes and procedures in place to try and mitigate the impact, but it is something that should be flagged as a risk for us going forward. Of course, it goes without saying, the current Middle East conflict is a part of, sort of, some huge level of uncertainty and volatility at the moment. How that plays out is really hard to assess at the moment. In terms of cargo, similar. The cargo flows, again, hard to predict or project.

Speaker #1: Whether it's new aircraft deliveries , whether it's parts for maintenance that still does have challenges . And we anticipate they will continue . We've got lots of processes and procedures in place to try and mitigate the impact , but it is something that should be flagged as a as a risk for us going forward .

Speaker #2: So to wrap up before we I pass over to Andy to questions. We've had three solid or three consecutive solid years of financial performance.

Speaker #2: Which on the back of that has enabled us to strengthen our balance sheet. We've been able to buy back shares. We've been able to reward our people.

Speaker #1: And of course , it goes without saying . The current Middle East conflict is a part of of some huge level of uncertainty and volatility at the moment and how that plays out is really hard to to assess at the moment in terms of cargo , similar , the cargo flows again , hard to predict or project , but as Ronald talked to you earlier , asked us specializations , give us some advantages in certain areas and our ability to be flexible with our network to move where the demand is coming from .

Speaker #2: We've been able to commit to investing $100 billion in aircraft, in product, etc., for our customers, for Hong Kong. We've been able to pay dividends as a result as well.

Speaker #2: So as we look forward into 2026, we're confident this year. We're 10% capacity. I'm caveating that based on the current world situation. But generally, we're confident with our 10% capacity projection for the rest of the year.

[CFO] (Cathay Pacific Airways): As Ronald talked to you earlier, our specializations give us some advantage in certain areas, and our ability to be flexible with our network to move where the demand is coming from has enabled us to have a solid performance in cargo in 2025. We also have the sixth freighter aircraft delivering in the future. Until then, the increase in capacity on the cargo side will continue to come from the increased capacity on the passenger aircraft. To wrap up before I pass over to Andy for questions. We've had three solid or three consecutive solid years of financial performance, which on the back of that has enabled us to strengthen our balance sheet. We've been able to buy back shares, we've been able to reward our people.

Rebecca Sharpe: As Ronald talked to you earlier, our specializations give us some advantage in certain areas, and our ability to be flexible with our network to move where the demand is coming from has enabled us to have a solid performance in cargo in 2025. We also have the sixth freighter aircraft delivering in the future. Until then, the increase in capacity on the cargo side will continue to come from the increased capacity on the passenger aircraft. To wrap up before I pass over to Andy for questions. We've had three solid or three consecutive solid years of financial performance, which on the back of that has enabled us to strengthen our balance sheet. We've been able to buy back shares, we've been able to reward our people.

Speaker #2: And of course, also as Ronald said, 2026 is a very special year for us. It's our 80th anniversary. And we'll be holding all sorts of exciting events through the course of the year to mark the 80 decades that we've grown in Hong Kong and to celebrate our unique position as being deeply rooted in Hong Kong, proudly part of China, and connecting us to the world.

Speaker #1: This has enabled us to have a solid performance in cargo in 2025, and we also have the six freighter aircraft delivering in the future.

Speaker #1: Until then , they're increasing capacity on the cargo side will come continue to come from the increased capacity on the passenger aircraft So to wrap up , before we I pass over to Andy to questions .

Speaker #1: We've had three solid, or three consecutive solid, years of financial performance, which on the back of that has enabled us to strengthen our balance sheet.

Speaker #1: We've been able to buy back shares. We've been able to reward our people. We've been able to commit to investing $100 billion in.

[CFO] (Cathay Pacific Airways): We've been able to commit to investing HKD 100 billion in aircraft and product, et cetera, for our customers, for Hong Kong. We've been able to pay dividends as a result as well. As we look forward into 2026, we're confident this year with a 10% capacity. I'm caveating that based on the current world situation, but generally, we're confident with our 10% capacity projection for the rest of the year. Of course, also, as Ronald said, 2026 is a very special year for us. It's our 80th anniversary, and we'll be holding all sorts of exciting events through the course of the year to mark the eight decades that we've grown in Hong Kong and to celebrate our unique position as being deeply rooted in Hong Kong, proudly part of China, and connecting us to the world.

Rebecca Sharpe: We've been able to commit to investing HKD 100 billion in aircraft and product, et cetera, for our customers, for Hong Kong. We've been able to pay dividends as a result as well. As we look forward into 2026, we're confident this year with a 10% capacity. I'm caveating that based on the current world situation, but generally, we're confident with our 10% capacity projection for the rest of the year. Of course, also, as Ronald said, 2026 is a very special year for us. It's our 80th anniversary, and we'll be holding all sorts of exciting events through the course of the year to mark the eight decades that we've grown in Hong Kong and to celebrate our unique position as being deeply rooted in Hong Kong, proudly part of China, and connecting us to the world.

Speaker #1: Aircraft and product , etc. for our customers . For Hong Kong , we've been able to pay dividends as a result , as well .

Speaker #1: So as we look forward into 2026, we're confident this year with 10% capacity. I'm caveating that based on the current world situation, but generally we're confident with our 10% capacity projection for the rest of the year.

Speaker #1: And of course , also , as Ronald said , 2026 is a very special year for us . It's our 80th anniversary and we'll be holding all sorts of exciting events through the course of the year to mark the the 80 decades that we've grown in Hong Kong and to celebrate our unique position as being deeply rooted in Hong Kong .

Speaker #1: Proudly part of China, and connecting us to the world with that. I will hand on to Q&A.

[CFO] (Cathay Pacific Airways): With that, I'll hand over to Q&A.

Rebecca Sharpe: With that, I'll hand over to Q&A.

Speaker #2: Well Okay , well , thank you , Ronald and Rebecca , for your very comprehensive presentation . So we'll now open the floor to questions if you'd like to .

[Investor Relations Director] (Cathay Pacific Airways): Okay. Well, thank you, Ronald and Rebecca, for your very comprehensive presentation. We'll now open the floor to questions. If you would like to ask a question, kindly raise your hand and I'll call on you, and one of our colleagues will hand you a microphone. Please state your name and organization before you ask the question. The floor is open. Any questions?

[Company Representative] (Cathay Pacific Airways): Okay. Well, thank you, Ronald and Rebecca, for your very comprehensive presentation. We'll now open the floor to questions. If you would like to ask a question, kindly raise your hand and I'll call on you, and one of our colleagues will hand you a microphone. Please state your name and organization before you ask the question. The floor is open. Any questions?

Speaker #2: If you would like to ask a question, kindly raise your hand and I'll call on you, and one of our colleagues will hand you a microphone.

Speaker #2: Please state your name and organisation before you ask the question. So, the floor is open. Any questions?

Speaker #1: Wow. Everybody's very shy.

[CFO] (Cathay Pacific Airways): Wow, everybody's very shy.

Rebecca Sharpe: Wow, everybody's very shy.

Speaker #2: The gentleman in the back. Thank you very much. This is Perry from UBS, and congratulations for this very strong result for three years in a row.

[Investor Relations Director] (Cathay Pacific Airways): The gentleman in the back.

[Company Representative] (Cathay Pacific Airways): The gentleman in the back.

[Analyst] (UBS): Thank you very much. This is Perry from UBS. Congratulations for this very strong result for 3 years in a row. I got 2 questions. First related to your passenger capacity. You've been saying, we are going to grow 10% this year. In terms of the fleet, we are probably growing at 4% in terms of your passenger aircraft. I'm curious in terms of the growth, where would drive that 10% capacity growth. That's my first question. The second question is, related to the situation in Middle East. Obviously, it drive up this, the fuel price significantly, and spread has widened very significantly too.

Perry Yeung: Thank you very much. This is Perry from UBS. Congratulations for this very strong result for 3 years in a row. I got 2 questions. First related to your passenger capacity. You've been saying, we are going to grow 10% this year. In terms of the fleet, we are probably growing at 4% in terms of your passenger aircraft. I'm curious in terms of the growth, where would drive that 10% capacity growth. That's my first question. The second question is, related to the situation in Middle East. Obviously, it drive up this, the fuel price significantly, and spread has widened very significantly too.

Speaker #2: I have two questions. First, related to your passenger capacity: you've been saying you are going to grow 10% this year.

Speaker #2: But in terms of the fleet, we are probably growing at 4% in terms of passenger aircraft. I'm curious, in terms of the growth, where would that 10% capacity growth be driven from?

Speaker #2: That's my first question. And the second question is related to the situation in the Middle East. Obviously, it drives up the fuel price significantly and has widened very significantly, so what sort of approach...

[Analyst] (UBS): What sort of approach Cathay would take in this situation where spread has widened to an extent that we didn't really see over the last 1 to 2 decades? Would fare ticket price adjustment be something on the table to address the higher fuel costs? That's all for now. Thanks.

Perry Yeung: What sort of approach Cathay would take in this situation where spread has widened to an extent that we didn't really see over the last 1 to 2 decades? Would fare ticket price adjustment be something on the table to address the higher fuel costs? That's all for now. Thanks.

Speaker #2: Cathay would take in this situation where 'crispbread' has widened in a to an extent that we didn't really see over the last 1 to 2 decades.

Speaker #2: And would would a price adjustment be be something on the tables to address the the the higher fuel costs ? That's all for now .

Speaker #2: Thanks .

Speaker #1: Thank you. Perry, do you—

[CFO] (Cathay Pacific Airways): Thank you, Perry. Do you-

Rebecca Sharpe: Thank you, Perry. Do you-

Speaker #2: Yeah, I'm happy to take that. Okay.

[CEO] (Cathay Pacific Airways): Yeah, I'm happy to take.

Ronald Lam: Yeah, I'm happy to take.

Speaker #1: You can

[CFO] (Cathay Pacific Airways): Okay. You can.

Rebecca Sharpe: Okay. You can.

Speaker #3: The first question regarding our passenger capacity: 10% year on year projected for 2026. First, we are still taking delivery of eight narrowbody aircraft this year.

[CEO] (Cathay Pacific Airways): The first question regarding our passenger capacity, 10% year-on-year projected for 2026. First, we are still taking delivery of 8 narrow body aircraft this year. That would give us more capacity. Second is that throughout 2025, month-on-month, actually, we've been growing until we hit the peak in December. When we keep 2026 even flat, I think there's still year-on-year growth, particularly on the earlier month of the year. I think that would generate a 10%. The second question regarding the spike in fuel price. Yes, as Rebecca mentioned, comparing the March jet fuel price to the last two months, it has almost doubled. I think it's a sharp surge.

Ronald Lam: The first question regarding our passenger capacity, 10% year-on-year projected for 2026. First, we are still taking delivery of 8 narrow body aircraft this year. That would give us more capacity. Second is that throughout 2025, month-on-month, actually, we've been growing until we hit the peak in December. When we keep 2026 even flat, I think there's still year-on-year growth, particularly on the earlier month of the year. I think that would generate a 10%. The second question regarding the spike in fuel price. Yes, as Rebecca mentioned, comparing the March jet fuel price to the last two months, it has almost doubled. I think it's a sharp surge.

Speaker #3: So that would give us more capacity. Second is that throughout 2025, month on month, actually, we've been growing until we hit the peak in December.

Speaker #3: So when we keep 2026 even flat , I think there's still year on year growth , particularly on the earlier month of the year .

Speaker #3: So I think that will generate a 10% . The second question regarding the spike in fuel price . Yes , Rebecca mentioned , comparing the March jet fuel price comparing to the last two months , it has almost doubled .

Speaker #3: So I think it's a sharp search, and we hope that with a peaceful resolution of the current conflict, things will be more back to normal sooner rather than later.

[CEO] (Cathay Pacific Airways): We hope that this peaceful resolution of the current conflict, that things will be more back to normal sooner rather than later. In the meantime, I think we would rely on our mitigation measures. As Rebecca mentioned, I think 30% of our fuel is hedged for 2026, although we're only hedging the crude oil part, not the crack part. Secondly, we have a fuel surcharge mechanism both on the travel side as well as on the cargo side. The fuel surcharge takes into account jet fuel price. Since jet fuel has almost doubled, I think we'll be making an announcement about increasing fuel surcharges for both travel and cargo in due course. That's another mitigation.

Ronald Lam: We hope that this peaceful resolution of the current conflict, that things will be more back to normal sooner rather than later. In the meantime, I think we would rely on our mitigation measures. As Rebecca mentioned, I think 30% of our fuel is hedged for 2026, although we're only hedging the crude oil part, not the crack part. Secondly, we have a fuel surcharge mechanism both on the travel side as well as on the cargo side. The fuel surcharge takes into account jet fuel price. Since jet fuel has almost doubled, I think we'll be making an announcement about increasing fuel surcharges for both travel and cargo in due course. That's another mitigation.

Speaker #3: But in the meantime , I think we would rely on our mitigation measures . So as Rebecca mentioned , I think 30% of our fuel is hatched for 2026 , although we're only hedging the crude oil part , not the cracked part .

Speaker #3: Secondly, we have a few surcharge mechanisms both on the travel side as well as on the cargo side. So, the fuel surcharge takes into account jet fuel price.

Speaker #3: And since jet fuel has almost doubled, I think we'll be making an announcement about increasing fuel surcharges for both travel and cargo in due course.

Speaker #3: So that's another mitigation. And in terms of our freight age and fares, we will have to look at the supply and demand, which is also pretty volatile.

[CEO] (Cathay Pacific Airways): In terms of our freightage and fares, we will have to look at the supply and demand, which is also pretty volatile, right? There's quite drastic changes in terms of demand patterns due to the Middle East situation as well as supply situation is also different. Currently it's still dynamic. It's changing all the time, so I think we'll just charge according to supply and demand in the market and see what competition will be doing. I think we'll always look out for those kind of opportunity.

Ronald Lam: In terms of our freightage and fares, we will have to look at the supply and demand, which is also pretty volatile, right? There's quite drastic changes in terms of demand patterns due to the Middle East situation as well as supply situation is also different. Currently it's still dynamic. It's changing all the time, so I think we'll just charge according to supply and demand in the market and see what competition will be doing. I think we'll always look out for those kind of opportunity.

Speaker #3: Right. There's quite drastic changes in terms of demand patterns due to the Middle East situation, as well as the supply situation, which is also different.

Speaker #3: So . Currently it's still dynamic . It's changing all the time . So I think we'll we'll just charge according to supply and demand in the market .

Speaker #3: And see what the competition will be doing. So I think we'll always look out for those kinds of opportunities. Okay. Thank you.

[Analyst] (UBS): Okay. Thank you, Ronald.

Perry Yeung: Okay. Thank you, Ronald.

Speaker #3: Rhino

Speaker #2: Okay . Maybe perhaps we can turn to a couple of questions online . So we have a question from question from HSBC . So it's about capacity .

[Investor Relations Director] (Cathay Pacific Airways): Okay. Maybe perhaps we can turn to a couple of questions online. We have a question from HSBC, so it's about capacity. The question goes, how are the capacity from the canceled Middle East flights being deployed? Are they idling or are they flying?

[Company Representative] (Cathay Pacific Airways): Okay. Maybe perhaps we can turn to a couple of questions online. We have a question from HSBC, so it's about capacity. The question goes, how are the capacity from the canceled Middle East flights being deployed? Are they idling or are they flying?

Speaker #2: So the question goes: how are the capacity from the cancelled Middle East flights being deployed? Are they idling, or are they flying?

[CEO] (Cathay Pacific Airways): Okay. Well, first of all, we have been flying to two destinations only in the Middle East, Dubai and Riyadh. Each of those destinations, we have a daily frequency. We're talking about two flights per day to the Middle East. It's not a huge number of flights that we are operating. Currently, we've decided to suspend those flights until end of this month, 31 March. We are trying to deploy the capacity in the meantime to other popular routes. For example, we'll be adding a few more flights to London, and we'll be upgrading the aircraft currently we fly into Zurich to create a bit more capacity for our European customers.

Ronald Lam: Okay. Well, first of all, we have been flying to two destinations only in the Middle East, Dubai and Riyadh. Each of those destinations, we have a daily frequency. We're talking about two flights per day to the Middle East. It's not a huge number of flights that we are operating. Currently, we've decided to suspend those flights until end of this month, 31 March. We are trying to deploy the capacity in the meantime to other popular routes. For example, we'll be adding a few more flights to London, and we'll be upgrading the aircraft currently we fly into Zurich to create a bit more capacity for our European customers.

Speaker #3: Okay. Well, first of all, we have been flying to two destinations only in the Middle East: Dubai and Riyadh, and for each of those destinations, we had a daily frequency.

Speaker #3: So, we have about two flights per day to the Middle East. So it's not a huge number of flights that we are operating.

Speaker #3: And currently, we've decided to suspend those flights until the end of this month, the 31st of March. And we are trying to deploy the capacity.

Speaker #3: In the meantime, to other popular routes, for example, we'll be adding a few more flights to London, London, and we'll be upgrading the aircraft currently we fly into Zurich to create a bit more capacity for our European customers.

[Investor Relations Director] (Cathay Pacific Airways): Okay. Thank you. Perhaps we'll take one more question from online to see whether to give some time to the physical audience to see whether they have a question. The next question is about another line of business on HK Express. It's a few part questions, so we can maybe address them one by one. I think the first question is, do you expect any delays for the delivery of your new fleet? I think that's general across Cathay Pacific and HK Express. For HK Express, how do we differentiate ourselves from other LCC such as Scoot or AirAsia? Thank you.

[Company Representative] (Cathay Pacific Airways): Okay. Thank you. Perhaps we'll take one more question from online to see whether to give some time to the physical audience to see whether they have a question. The next question is about another line of business on HK Express. It's a few part questions, so we can maybe address them one by one. I think the first question is, do you expect any delays for the delivery of your new fleet? I think that's general across Cathay Pacific and HK Express. For HK Express, how do we differentiate ourselves from other LCC such as Scoot or AirAsia? Thank you.

Speaker #2: Okay . Thank you Perhaps we'll take one more question from online to see whether give some time to the to the physical to the physical audience to see whether they have a question .

Speaker #2: So the next question is about another line of business, which is on HK Express. It's a few-part question, so we can maybe address them one by one.

Speaker #2: So, I think the first question is, do you expect any delays for the delivery of your new fleet? So that's general across Cathay Pacific and Euro.

Speaker #2: And for you all, how do we differentiate ourselves from other LCCs, such as Scoot or AirAsia? Thank you.

[CEO] (Cathay Pacific Airways): Well, in terms of fleet delivery for HK Express, we still have a number of orders. Remember we ordered 32 narrow body aircraft between Cathay Pacific and HK Express, and they are going to start to arrive later this year. For example, this year, HK Express will be taking delivery of five such aircraft and then more to come in 2027, 2028 onwards. So far I think, there's no major delay on these delivery. I think pretty much on-time, I would say by and large, with some small adjustments. We don't expect any major issues when it comes to narrow body fleet delivery. What was the second question? Sorry. Please.

Ronald Lam: Well, in terms of fleet delivery for HK Express, we still have a number of orders. Remember we ordered 32 narrow body aircraft between Cathay Pacific and HK Express, and they are going to start to arrive later this year. For example, this year, HK Express will be taking delivery of five such aircraft and then more to come in 2027, 2028 onwards. So far I think, there's no major delay on these delivery. I think pretty much on-time, I would say by and large, with some small adjustments. We don't expect any major issues when it comes to narrow body fleet delivery. What was the second question? Sorry. Please.

Speaker #3: Well, in terms of fleet delivery for HK Express, we still have a number of orders. Remember, we ordered 32 narrowbody aircraft between Cathay Pacific and HK Express, and they are going to start to arrive later this year.

Speaker #3: So, for example, this year, HE Express will be taking delivery of five such aircraft, and then more to come in 2027–28 onwards.

Speaker #3: So far I think there's no major delay on these delivery . I think pretty much on time . I will say by and large , with some small adjustments , so we don't expect any major issues when it comes to narrowbody fleet delivery .

Speaker #3: What was the second question? Sorry, just—

[Investor Relations Director] (Cathay Pacific Airways): The differentiation strategy.

[Company Representative] (Cathay Pacific Airways): The differentiation strategy.

[CEO] (Cathay Pacific Airways): Differentiation strategy. We work really hard on our fundamentals. We are very proud about our on-time performance. For example, last year's on-time performance of HK Express was 88%, a very high on-time performance, highly reliable. We are also very proud of our brand. It's a very popular brand in Hong Kong and also in the Greater Bay Area. We are getting a much more popular presence among airlines in the Greater Bay Area. In fact, we are the biggest airline based among all the Greater Bay Area based airlines. We are the biggest in terms of cross-border flying to the rest of Asia. In Hong Kong, we are also the second biggest airline based in Hong Kong after Cathay Pacific.

Speaker #2: The differentiation strategy .

Ronald Lam: Differentiation strategy. We work really hard on our fundamentals. We are very proud about our on-time performance. For example, last year's on-time performance of HK Express was 88%, a very high on-time performance, highly reliable. We are also very proud of our brand. It's a very popular brand in Hong Kong and also in the Greater Bay Area. We are getting a much more popular presence among airlines in the Greater Bay Area. In fact, we are the biggest airline based among all the Greater Bay Area based airlines. We are the biggest in terms of cross-border flying to the rest of Asia. In Hong Kong, we are also the second biggest airline based in Hong Kong after Cathay Pacific.

Speaker #3: Okay . Differentiation strategy . We work really hard on our fundamentals . So we we are very proud about our on time performance for example , last year's on time performance of HK express was 88% , a very high on time performance , highly reliable .

Speaker #3: We are also very proud of our brand. It's a very popular brand in Hong Kong and also in the Greater Bay Area.

Speaker #3: We are getting a much more popular presence among airlines in the Greater Bay Area. In fact, we are the biggest airline based among all the Greater Bay Area-based airlines.

Speaker #3: We are the biggest in terms of cross-border flying to the rest of Asia, and in Hong Kong. We are also the second biggest airline based in Hong Kong after Cathay Pacific.

[CEO] (Cathay Pacific Airways): Differentiation with other LCC. I think LCC have a number of best practice that we are learning from each other. We respect those brands that has been mentioned by HSBC colleague. I think we will continue to learn from other LCC, and other LCC I'm sure is learning from us as well. I think we'll just keep that going. I believe the key advantage we have is that we not only have the Hong Kong market, but we have a very big Greater Bay Area market. In fact, around 1/3 of our revenue for HK Express is already coming from the mainland cities of the Greater Bay Area. That is the second largest point of sales after Hong Kong already, and it's keep growing all the time.

Ronald Lam: Differentiation with other LCC. I think LCC have a number of best practice that we are learning from each other. We respect those brands that has been mentioned by HSBC colleague. I think we will continue to learn from other LCC, and other LCC I'm sure is learning from us as well. I think we'll just keep that going. I believe the key advantage we have is that we not only have the Hong Kong market, but we have a very big Greater Bay Area market. In fact, around 1/3 of our revenue for HK Express is already coming from the mainland cities of the Greater Bay Area. That is the second largest point of sales after Hong Kong already, and it's keep growing all the time.

Speaker #3: So, differentiation with other LCCs—I think LCCs have a number of best practices that we are learning from each other. So, we respect those brands that have been mentioned by the HSBC colleague.

Speaker #3: So I think we will continue to learn from other LCC and other LCC . I'm sure is learning from us as well . So I think we'll just keep that going But I believe the key advantage we have is that we not only have the Hong Kong market , but we have a very big , greater Bay area market .

Speaker #3: In fact, around one third of our HK Express revenue is already coming from the mainland cities in the area. That is the second largest point of sales after Hong Kong already.

Speaker #3: And it's keep growing all the time . So I think that's one unique advantage . I would say we have . Yeah . Thank you .

[CEO] (Cathay Pacific Airways): I think that's one unique advantage I would say we have. Yeah. Thank you.

Ronald Lam: I think that's one unique advantage I would say we have. Yeah. Thank you.

[Investor Relations Director] (Cathay Pacific Airways): Okay. Thank you. Well, a couple of questions on the passengers after business, so maybe we can address it in one go. The question is, well, since the Middle East tension broke out, has passenger yield stopped declining or is it normalizing? Also what's the demand for Cathay Pacific's looking like? Any variation by region? Thank you.

[Company Representative] (Cathay Pacific Airways): Okay. Thank you. Well, a couple of questions on the passengers after business, so maybe we can address it in one go. The question is, well, since the Middle East tension broke out, has passenger yield stopped declining or is it normalizing? Also what's the demand for Cathay Pacific's looking like? Any variation by region? Thank you.

Speaker #2: Okay. Thank you. We have a couple of questions on the passenger side of the business, so maybe we can address it in one go.

Speaker #2: So, the question is, well, since the Middle East tension broke out, has passenger yield stopped declining or is it normalizing? And also, what's the demand for Cathay Pacific looking like—any variation by region?

Speaker #2: Thank you

[CEO] (Cathay Pacific Airways): Well, I think it's still early days. In the meantime, many of the Middle Eastern carriers have drastically reduced their operations. Therefore we have seen some short-term surge in demand on our flights. Like our flights between Hong Kong and Europe in particular have seen a surge in demand. Our long-haul flights in the short run are already very full, pretty full, even before the conflict. Our room to take on new bookings actually is limited, I would say. Second question was,

Ronald Lam: Well, I think it's still early days. In the meantime, many of the Middle Eastern carriers have drastically reduced their operations. Therefore we have seen some short-term surge in demand on our flights. Like our flights between Hong Kong and Europe in particular have seen a surge in demand. Our long-haul flights in the short run are already very full, pretty full, even before the conflict. Our room to take on new bookings actually is limited, I would say. Second question was,

Speaker #3: Well , I think it's still early days , but in the meantime , many of the Middle Eastern carrier has drastically reduced their operation and therefore we have seen some short term surge in demand on our flights , like our flights .

Speaker #3: Between Hong Kong and Europe in particular , has seen a surge in and but our long haul flights in the short runs are already very full , pretty full , even before the conflict .

Speaker #3: So our room to take on new bookings actually is limited, I would say. And the second question was...

[Investor Relations Director] (Cathay Pacific Airways): Well, by region. Were there any variation by region? What's the Cathay Pacific businesses looking like?

[Company Representative] (Cathay Pacific Airways): Well, by region. Were there any variation by region? What's the Cathay Pacific businesses looking like?

Speaker #2: Well , by region and were there any variation by region ? What's the Cathay Pacific business is looking like ?

[CEO] (Cathay Pacific Airways): Well, again, short term I mentioned, European demand, European flight demand has seen a surge, definitely. Other long-haul flights, right, has also seen some uptick in the short run. For example, I think India market relies quite a lot to go through Middle East to go to the US. But now they can't, and some of that demand has been channeled to go via Hong Kong to the US, for example. Our US flights, for example, has also seen a surge in demand. Australian flights because some of them go through Middle East to go to Europe. Now they go through Hong Kong, more of them go through Hong Kong than before, and therefore our Australian flights are also in higher demand.

Ronald Lam: Well, again, short term I mentioned, European demand, European flight demand has seen a surge, definitely. Other long-haul flights, right, has also seen some uptick in the short run. For example, I think India market relies quite a lot to go through Middle East to go to the US. But now they can't, and some of that demand has been channeled to go via Hong Kong to the US, for example. Our US flights, for example, has also seen a surge in demand. Australian flights because some of them go through Middle East to go to Europe. Now they go through Hong Kong, more of them go through Hong Kong than before, and therefore our Australian flights are also in higher demand.

Speaker #3: Well , again , short term , I mentioned European demand , European flight demand is is has seen a surge . Definitely . But other long haul flights right .

Speaker #3: Has also seen some uptake in the short run. For example, I think the India market relies quite a lot on going through the Middle East to go to the US.

Speaker #3: But now they can't. And some of that demand has been channeled to go via Hong Kong to the US, for example.

Speaker #3: So our US flight, for example, has also seen a surge in demand, and Australian flights, because some of them go through the Middle East to go to Europe.

Speaker #3: And , and now they go through Hong Kong , more of them go through Hong Kong than before and therefore our Australian flights are also in higher demand .

[CEO] (Cathay Pacific Airways): Basically, all the long-haul flights have seen a short-term uptick in demand. It's short term. I mean, it's changing by the day. I think we can't just count on that for the medium run. I think we will remain agile.

Ronald Lam: Basically, all the long-haul flights have seen a short-term uptick in demand. It's short term. I mean, it's changing by the day. I think we can't just count on that for the medium run. I think we will remain agile.

Speaker #3: So basically all the long haul flights are have seen a short term uptick in demand . But it's short term . I mean it's changing by the day .

Speaker #3: So, I think we can't just count on that for the medium run. So, I think we will be agile, okay.

[Investor Relations Director] (Cathay Pacific Airways): Okay. Thank you, Ronald. I think we'll take one more question from online, which is actually a mirror question for from the last one, but on cargo. The question was, Can you talk about a little bit more about your cargo business? Do you see yield normalizing, cargo yield normalizing? Is there any tailwind from the because as a result of the Middle East disruption? Thank you.

[Company Representative] (Cathay Pacific Airways): Okay. Thank you, Ronald. I think we'll take one more question from online, which is actually a mirror question for from the last one, but on cargo. The question was, Can you talk about a little bit more about your cargo business? Do you see yield normalizing, cargo yield normalizing? Is there any tailwind from the because as a result of the Middle East disruption? Thank you.

Speaker #2: Thank you, Ronald. I think we'll take one more question from online, which is actually a mirror question from the last one.

Speaker #2: But on cargo . So the question was can you talk about a little bit more about your cargo business . Do you see yield normalizing cargo yield normalizing .

Speaker #2: And is there any tailwind from that? Because, as a result of the Middle East disruption—thank you.

[CEO] (Cathay Pacific Airways): Yeah. Thank you. Well, cargo yield has been normalizing over the past few years, and we believe that trend will continue. Cargo market is very dynamic, right? The supply and demand is changing even faster than on the travel side. I think it's really hard to say. We would go where our customer want us to go, and we will try to compete and capture demand effectively. As you can see, I think the yield normalization has slowed down already last year-on-year. In terms of the short-term impact of the Middle Eastern situation to cargo, we haven't seen a major uptick because our flights from Hong Kong are pretty full already. We haven't seen a drastic change.

Ronald Lam: Yeah. Thank you. Well, cargo yield has been normalizing over the past few years, and we believe that trend will continue. Cargo market is very dynamic, right? The supply and demand is changing even faster than on the travel side. I think it's really hard to say. We would go where our customer want us to go, and we will try to compete and capture demand effectively. As you can see, I think the yield normalization has slowed down already last year-on-year. In terms of the short-term impact of the Middle Eastern situation to cargo, we haven't seen a major uptick because our flights from Hong Kong are pretty full already. We haven't seen a drastic change.

Speaker #3: Yeah, thank you. Well, cargo – you know, cargo has been normalizing over the past few years, and we believe that that trend will continue.

Speaker #3: But the cargo market is very dynamic, right? The supply and demand is changing even faster than on the travel side. So, I think it's really hard to say we would go where our customers want us to go.

Speaker #3: And we will try to compete and capture demand effectively . So but as you can see , I think the the you normalization has slowed down already .

Speaker #3: Last year, year on year, in terms of the short-term impact of the Middle Eastern situation to cargo, we haven't seen a major uptake because our flights from Hong Kong are pretty full already.

Speaker #3: So, we haven't seen a drastic change. The more immediate impact is that we have a number of freighter flights that go to Europe with a stopover in Dubai for a tech stop and for uplifting more cargo.

[CEO] (Cathay Pacific Airways): The more immediate impact is that we have a number of freighter flights that go to Europe with a stopover in Dubai for tech stop and carry uplifting more cargo. But because of the situation in Dubai, we're now skipping that stopover, and we are flying direct from Hong Kong to Europe with some payload restriction because we couldn't uplift fuel in between. That's the small impact from a supply angle.

Ronald Lam: The more immediate impact is that we have a number of freighter flights that go to Europe with a stopover in Dubai for tech stop and carry uplifting more cargo. But because of the situation in Dubai, we're now skipping that stopover, and we are flying direct from Hong Kong to Europe with some payload restriction because we couldn't uplift fuel in between. That's the small impact from a supply angle.

Speaker #3: But because of the situation in Dubai, we're now skipping that stopover, and we are flying direct from Hong Kong to Europe with some payload restriction because we couldn't uplift fuel in between.

Speaker #3: So that's the small impact from a supply angle.

[Investor Relations Director] (Cathay Pacific Airways): Okay. Thank you, Ronald. Any questions from the room? Well, if not, then well, thank you to our speaker, and thank you for joining us today. That's all the time we have. This concludes the briefing for today, and if you have any further questions, please email them to ir@cathaypacific.com. Thank you and have a good day.

[Company Representative] (Cathay Pacific Airways): Okay. Thank you, Ronald. Any questions from the room? Well, if not, then well, thank you to our speaker, and thank you for joining us today. That's all the time we have. This concludes the briefing for today, and if you have any further questions, please email them to ir@cathaypacific.com. Thank you and have a good day.

Speaker #2: Okay . Thank you Ronald . Any questions from the room Well if not then well thank you to our speaker and thank you for joining us today .

Speaker #2: That's all the time we have. This concludes the briefing for today. If you have any further questions, please email them to IR at Cathay Pacific.