SEATTLE, March 30 - Cathay Pacific Airways is maintaining its plan to expand passenger capacity by 10% this year despite rising jet fuel prices due to the Middle East conflict. However, CEO Ronald Lam told Reuters that sustained high fuel costs could force the airline to reconsider its expansion strategy if demand declines.
Lam noted that while Cathay has seen increased demand for long-haul flights to North America, Europe, and Australia since the U.S.-Israeli conflict with Iran began last month, such demand may not be sustainable if fuel prices stay double their pre-conflict levels. He emphasized that cutting capacity would be a last resort but acknowledged it might become necessary if demand falls significantly.
The airline has already responded to higher oil prices by increasing fuel surcharges twice this month. Starting Wednesday, a return trip from Sydney to London will include an $800 fuel surcharge, reflecting the financial pressure on airlines.
Cathay is expanding capacity partly through new aircraft deliveries, including orders for 65 Airbus jets and 35 Boeing 777-9 widebody jets. The airline is the third-largest customer for the delayed 777X model, which is six years behind schedule. Lam expressed hope that the 777-9 would become Cathay's flagship aircraft when deliveries begin in 2027.
Meanwhile, other carriers like United Airlines, SAS, and Air New Zealand have already announced capacity cuts due to soaring fuel costs.