Cathay Pacific raises fuel surcharges 41% as jet fuel costs surge

Cathay Pacific will raise passenger and cargo fuel surcharges from Aug. 1, reversing three months of reductions, as renewed Middle East conflict pushes jet fuel prices higher.

Cathay Pacific will raise passenger and cargo fuel surcharges as much as 41% from Aug. 1, reversing three consecutive monthly reductions, as renewed Middle East tensions drive jet fuel prices to multi-month highs.

"The start of June has historically been a softer period for passenger travel demand, but this year load factors remained elevated, amplified by increased traffic through Hong Kong due to the Middle East situation," Lavinia Lau, chief customer and commercial officer at Cathay Pacific, said in the group's June traffic statement.

The surcharge increase follows three monthly reductions since May, when Cathay lowered passenger fuel surcharges by as much as 12.9%. Brent crude, the benchmark for jet fuel pricing, has climbed on escalating conflict in the Middle East, with risks to shipping lanes and regional energy infrastructure supporting prices. The airline group carried more than 3.1 million passengers in June across Cathay Pacific and HK Express, up 9% from a year earlier, while Cathay Cargo moved about 145,000 tonnes, also up 9%.

Profit Rises on Solid Demand

Cathay reported first-half 2026 profit attributable to shareholders of HK$6 billion to HK$6.5 billion, compared with about HK$3.7 billion a year earlier, though the figure includes a HK$1.4 billion gain from the dilution of its stake in Air China. The group's underlying performance was supported by continued solid demand for Cathay Pacific passenger and cargo services, improved results from HK Express and stronger contributions from associates. Cathay Pacific carried 12% more passengers in June than a year earlier, while available seat kilometers rose 6%. In the first six months, passenger numbers increased 17% year on year.

Fuel Costs Weigh on Outlook

The fuel surcharge increase signals that higher energy costs are eating into the airline's margin improvement. HK Express, the group's low-cost carrier, reduced capacity in June by consolidating a small number of flights to mitigate part of its increased fuel costs, as announced in April. The carrier carried more than 560,000 passengers in June, down 4% from a year earlier, though load factors on routes to the Chinese mainland, the Philippines and Thailand all exceeded 85%. Looking ahead, Cathay expects healthy cargo flows across its network but is monitoring the potential impact on e-commerce volumes from new European customs duties on low-value imports.

This article is for informational purposes only and does not constitute investment advice.