Cathay Pacific Airways: Business Exposure Brings Resilience; Resuming Coverage at OW

Research evidence excerpt

Cathay Pacific Airways: Business Exposure Brings Resilience; Resuming Coverage at OW

FoundationM

Investment Thesis

Investment positives

Premium demand supporting lucrative long-haul business

Hong Kong’s resilient macro backdrop provides a firmer top-down anchor for Cathay’s

premium-cabin demand, with 1Q26 real GDP growth accelerating to 5.9% YoY. Services

exports are expected to remain supported by inbound tourism, cross-boundary financial

activity, and business-services demand. (read more). Despite oil shocks, Hong Kong’s

growth is set to return to a post-2011 high this year, backed by China’s supply‑chain

resilience, a property upswing, improving tourism, and fiscal easing, outweighing labor

frictions from mainland e‑commerce penetration and AI diffusion (read more).

This is corroborated by hub-level traffic data, with HKIA’s 4M26 passenger traffic up

12.6%, driven by visitors and transfer/transit passengers. We see this as supporting

mainline passenger revenue quality and premium mix over the next 12–18 months:

• High exposure to business demand in Hong Kong: Cathay has offered close to

70% of business class seats in Hong Kong airport's traffic, by our estimate ( Exhibit

6 ).

• Mild expansion in long haul routes to Europe and North America: We estimate

19% YoY and 15% YoY ASK growth from Cathay, in 5M26, on European and North

America routes, respectively, versus ~13% YoY total ASK growth by the company.

• Resilient business outlook in Hong Kong: According to the latest Global Wealth

Report 2026 released by Boston Consulting Group (BCG), Hong Kong has officially

surpassed Switzerland as the world’s largest booking center for offshore wealth.

Exhibit 1: Cathay: YoY ASK growth Exhibit 2: Cathay: ASK exposure dynamics

ASK - YoY ASK exposure

35% 35%

33%

30%

31%

25% 29%