Passenger load factor reached 92.2% as jet fuel prices doubled in six weeks. Capacity reductions are expected for May and June.
HONG KONG, April 17, 2026 — The Cathay Group delivered one of its strongest traffic months in recent memory in March 2026, with Cathay Pacific’s passenger load factor reaching 92.2%, up 9.5 percentage points year on year, and HK Express crossing 750,000 passengers for the month.
However, these strong results hide a growing cost problem. Jet fuel prices have nearly doubled since late February, putting at risk the demand boost the group has enjoyed since the Middle East conflict started changing global aviation patterns.
Demand Surges, Driven by Conflict-Rerouting and Seasonal Events
Cathay Pacific carried 2.8 million passengers in March, up 24.5% from March 2025. Revenue Passenger Kilometres (RPKs) grew 21.9%, while Available Seat Kilometres (ASKs) increased by only 9.3%. This gap explains the high load factor.
The difference between demand growth and capacity growth is intentional. Cathay has not tried to increase volume by adding more seats. Instead, demand has naturally increased.
Chief Customer and Commercial Officer Lavinia Lau pointed to a confluence of demand drivers. Art Basel Hong Kong and the Hong Kong International Jewellery Show drew premium travellers from across the network in the first half of the month.
Lebaran travel from Indonesia and pre-Easter leisure bookings increased short-haul passenger numbers in the second half of the month. The continued suspension of flights over Middle Eastern airspace has also shifted long-haul travelers, especially those connecting between Europe and Asia, to use Hong Kong as a main transit hub. This has led to what Lau called “robust volumes” on Cathay’s routes.
Cathay Pacific launched its non-stop service to Seattle on March 30, adding a new North American spoke to its expanding long-haul network.
For Q1 2026 as a whole, Cathay Pacific carried nearly 8 million passengers, up 19.8% over Q1 2025, with ASKs up 13.1%, confirming that demand has consistently outrun capacity additions across the quarter.
HK Express: Growth Momentum Intact
The group’s low-cost unit, HK Express, had a strong month by any measure, carrying 750,668 passengers up 21.8% year on year, while RPKs grew 19.9% against ASK growth of 12.2%. The resulting load factor of 84.4% (up 5.4 percentage points) reflects tight yields on popular leisure routes to the Northeast and Southeast Asia.
In the first quarter, HK Express carried 2.2 million passengers, a 17.6% increase from last year. The airline also announced daily direct flights to Wuxi starting July 17, expanding its presence in mainland China.
Cathay Cargo: Solid Tonnage Growth, Fewer Freighter Sectors
Cathay Cargo carried 165,143 tonnes in March, up 11% year on year, with a cargo load factor at 62.9%, up 1.5 percentage points. However, a detail worth flagging: the number of freighter flight sectors actually declined by 3% in March and is down 3.4% YTD.
Tonnage growth is being achieved on fewer flights, suggesting higher utilisation per sector rather than network expansion, reflecting freighter service suspensions to Dubai and Riyadh, which remain in place until May 31.
Growth occurred across Hong Kong, the Greater Bay Area, mainland China, Southeast Asia, and Europe.
Premium freight services like Cathay Priority, Cathay Expert, and Cathay Dangerous Goods all saw higher volumes. This was driven by more semiconductor and chemical shipments, as well as the rerouting of urgent freight away from the Middle East.
The Fuel Problem: A Near-Doubling in Six Weeks
Operational performance is strong, but the financial situation is more challenging.
IATA data cited by the group shows the global average jet fuel price at US$197.83 per barrel for the week ending April 10, 2026, compared with US$99.40 per barrel for the week ending February 27. That is a 99% increase in roughly six weeks.
For context, jet fuel typically accounts for 20–30% of an airline’s total operating costs in a stable price environment. At current levels, the cost burden is extraordinary.
Cathay has adjusted fuel surcharges in response, but the group acknowledged these measures “have not been enough to mitigate the significantly increased fuel costs.
” As a result, it has taken the unusual step of consolidating a small number of flights from mid-May through end-June, affecting approximately 2% of Cathay Pacific’s total frequencies and around 6% of HK Express’s frequencies during that window.
The asymmetry between those two figures is notable. HK Express, operating on thinner margins typical of low-cost carriers, is absorbing a disproportionately larger share of the capacity cuts relative to its network size.
Outlook: Demand Robust, Cost Trajectory Uncertain
April demand is expected to stay strong, driven by Easter holidays and continued rerouting traffic through Hong Kong. Cathay plans to operate all scheduled flights beyond June, but this depends on developments in the Middle East and future jet fuel prices.
That caveat is not boilerplate. With fuel at current levels, the group is managing a demand environment it cannot fully monetise without significant yield recovery, which is constrained by competitive pressure and the price sensitivity of the leisure segment, which has been driving much of the volume growth.
The March numbers confirm that Cathay Pacific is arguably the biggest structural beneficiary of the Middle East aviation disruption among Asian network carriers. The question heading into Q2 is whether that demand premium can offset a fuel bill that, by the group’s own account, has fundamentally changed the cost calculus of operating its network.
