Core Points - China Southern Airlines (CSA) will officially implement its 2025/26 winter-spring flight schedule from October 26, 2025, to March 28, 2026, with a total of approximately 470,000 passenger flights planned [1] - The airline is focusing on strengthening its route network from key hubs such as Guangzhou, Beijing Daxing, and Urumqi, with new domestic and international routes being introduced [1] - CSA plans to launch new international routes including Guangzhou-Madrid and Guangzhou-Darwin, and will increase flight frequencies to Australia by 30% compared to the previous year [1] - The fleet of domestically produced C909 and C919 aircraft is expanding, with over 700 weekly flights planned using these aircraft [1] Passenger Operations - New domestic routes include daily flights from Beijing Daxing to Xishuangbanna and increased frequencies on routes from Guangzhou to Hangzhou, Wenzhou, and Fuzhou [1] - Internationally, CSA will resume direct flights from Guangzhou to Perth and Adelaide, and increase the number of round-trip flights to Sydney and Brisbane by nearly 160 [1] Cargo Operations - CSA Logistics will execute a new cargo season plan, operating 31 cargo routes and reaching 15 destinations, covering major markets in the Americas, Europe, and the Middle East [2] - The expected number of cargo flight operations is over 5,400 [2]

Core Viewpoint - Cathay Pacific maintains a robust financial performance in the first half of 2025 despite uncertainties in the business environment, with the group’s passenger airline having launched or announced 19 new routes, reaching over 100 destinations globally. However, the latest financial data indicates notable changes in key financial metrics amid rapid expansion [1]. Financial Performance - In 2024, Cathay Pacific's total revenue reached HKD 104.37 billion, a 10.5% increase from HKD 94.49 billion in 2023 [3]. - Shareholder profit attributable increased slightly by 5.9% to HKD 9.61 billion, showing a significant slowdown in growth [3]. - Earnings per share rose from HKD 14.68 to HKD 16.21, while earnings per share slightly decreased from HKD 2.24 to HKD 2.20 [3]. - Return on equity improved from 14.64% in 2023 to 17.08% in 2024, and return on total assets increased from 5.11% to 5.56% [3]. - However, net asset per share declined from HKD 9.32 to HKD 8.15, indicating adjustments in the company’s asset structure [3]. - Cash flow indicators showed deterioration, with net cash flow per share at negative HKD 0.37 compared to positive HKD 0.09 in 2023, and operating cash flow per share decreased from HKD 4.10 to HKD 3.66 [3]. Liquidity Concerns - Cathay Pacific's liquidity situation has worsened, with the current ratio dropping from 0.67 in 2021 to 0.38 in 2024, and the quick ratio falling from 0.64 to 0.36 [4]. - Net current liabilities increased significantly from HKD 14.24 billion in 2021 to HKD 30.99 billion in 2024, more than doubling [4]. - Total current liabilities reached HKD 50.24 billion, while current assets totaled only HKD 19.25 billion, indicating a significant mismatch in asset-liability duration [4]. - Cash and cash equivalents decreased from HKD 8.32 billion in 2023 to HKD 7.27 billion, which may affect the company's ability to respond to emergencies amid rapid expansion [4]. - Short-term debt rose to HKD 11.63 billion from HKD 10.52 billion in 2023, increasing short-term repayment pressure [4]. Business Expansion Challenges - The company plans to invest over HKD 100 billion in fleet, cabin, lounge products, and digital innovation, aiming to enhance customer experience through increased flights and destinations [6]. - However, this large-scale investment strategy faces risks given the current financial situation [6]. - Hong Kong Express, a key component of Cathay Pacific, reported a loss of HKD 400 million in 2024, a significant decline from a profit of HKD 433 million in 2023 [6]. - Although ticket bookings to Japan have shown recovery, they have not yet returned to normal levels, and new routes require time to mature [6]. - Cathay Cargo achieved revenue of HKD 24 billion in 2024, an 8.3% year-on-year increase, but faces challenges for sustainable growth amid a complex global trade environment [6]. - Overall, while revenue and profit growth are evident, liquidity deterioration, cash flow pressures, and losses from subsidiaries are critical issues that need careful financial risk management to ensure long-term sustainability [6].