Cathay Pacific recently announced that its budget airline subsidiary, Hong Kong Express, recorded a loss of HKD 524 million（about USD 66.9 million）in the first half of 2025, surpassing its total loss for the entire year of 2024.
As Hong Kong’s only low-cost carrier, the airline is now at a crossroads—balancing route network expansion with mounting short-term financial pressure.
At the earnings briefing, Cathay Pacific CEO Ronald Lam explained that rumors of an earthquake in Japan significantly dampened demand for travel to Japan among Hong Kong residents in the first half of the year, particularly in May and June. After the rumors were debunked in early July, demand gradually recovered, though not yet to pre-rumor levels. Since August, however, travel demand to Japan has shown a marked rebound.
Data shows that in the first half of this year, Hong Kong Express increased passenger capacity by 38% and passenger volume by 28%. But its passenger yield—a key indicator of average ticket prices—fell by 22%, leaving passenger revenue flat compared to the same period last year.
Cathay Pacific Chairman Patrick Healy noted that Hong Kong Express’s losses were primarily due to two factors:
* Rumors of earthquakes in Japan and other destinations temporarily deterred travelers from visiting these traditionally popular locations.
* Newly launched routes need time to mature before they can generate sustainable returns.
