Good afternoon. Welcome to Cathay Group's first analyst briefing in 2025. I'm Andy Wong, Cathay General Manager of Corporate Affairs. Thank you for joining us this afternoon. Introducing our speakers for today, Chief Customer and Commercial Officer, Ms. Lavinia Lau. Chief Financial Officer, Ms. Rebecca Sharpe. We will begin the presentations by our speakers, followed by a Q&A session. Slides from the presentations will be displayed alongside the live video for your convenience. A copy of the slides has also been sent to you by email. Analysts are invited to submit questions at any time during the webcast via the submission box in the bottom right of the window. We will read these out during the Q&A session. Without further ado, let's invite Lavinia to start the presentations. Lavinia?
Good afternoon, everyone. Thank you for joining us this afternoon. This is our agenda for today. I will start with outlining our group strategy, then I will pass over to Rebecca to talk about our performance highlights and the outlook. When we came out from the pandemic, I think we have set ourselves a very clear strategy. For the first two years post-COVID, 2023 and 2024, these will be our very important years to rebuild and invest. Thereafter, after these two years, our intention is to move really forward and to reach new heights together. I think that also dovetails very well with the opening of the Three-Runway System. Today, I think I will give you our report card as to how we did in the two years of rebuild.
I think at the end of the two-year period, I think we reached what we have set out for in terms of capacity, which is very important. By the end of December 2024, we have already reached around 90% of our pre-pandemic flight frequency on a group level, Cathay Pacific plus HK Express together, and we have reached over 80 destinations. Actually, it's in the high 80s. From next year onwards, we have set ourself a target to reaching full capacity, and I'm glad to advise that as of January, the Group have already reached 100% of pre-pandemic flight frequencies. In 2025, one of our important milestones is to reach 100 destinations within the Group. In fact, we have already announced quite a few. For Cathay Pacific, we have announced longer destinations, starting with Hyderabad, and then we have Dallas.
We have Brussels, Munich in Europe, and just yesterday, we have announced yet another longer destination, Rome, in the summer season. For our LCC, HK Express, they have also announced Sendai for January. The number of new destinations or the announcements will not stop here because our objective is to reach 100 within 2025. Obviously, to cope with our expansion, we will need a lot of people. 2024 had really been a record year for us in terms of hiring people. Throughout the year, we recruited a total of around 7,000 new employees, of which 5,000 are within the cabin crew community. By the end of 2024, the Group have reached 30,000+ employees. In the beginning of 2024, we mentioned that, of course, one of the very important staff groups that we need to beef up is our pilots group.
At that point, we have mentioned that for both Cathay Pacific and HK Express together, we will need 3,400 pilots if we want to reach 100% of our frequencies in the beginning of 2025. I am glad to report that we have actually surpassed that number. As of now, the Group together has 3,400 pilots. I think all these numbers should give you confidence that we are firmly on our rebuild road, and we are very fully resourced for our further expansion. We also want to inspire pride amongst not just our own people, but within our customers and within the greater Hong Kong public. I think last year, we had won a few very symbolic prizes. I think starting on the Premium Travel Size Skytrax, which is like the Oscars in the aviation industry, we had won world number five.
Again, this is very significant because in 2023, we managed to reach first time going back to top 10 after the pandemic. In 2024, we reached top five. Our ambitions won't stop there, and we will continue to reach even better positions in the coming years. Our new products also start to receive a lot of attention. I think this year, very importantly, we have launched our new longer business class product, the Aria Suite, and also a new premium economy on the 777-300ER fleet as well. They have already won a couple of very important industry design awards. Also on the cargo side, we continue to innovate and invest in sustainability. I think it is also very glad to see that we are getting recognition on our sustainability efforts.
Not so long ago, we have announced that in the coming seven years, we will be investing over HKD 100 billion within the Group for the future of ourselves and for Hong Kong as an aviation hub. Majority of that investment will naturally go into our fleet. I think, in our last sharing, we have already shown this fleet. I think the key update you can see is that 777-9, we have 21 aircraft on order. The delivery timeline as I think you also all follow the aviation news very closely. Boeing has recently announced that the first delivery will be pushed back to 2026. We do expect our deliveries to be postponed correspondingly as well from the original 2025 now to 2026.
In 2026, we have also made our second order of A320 and A321neo aircraft, a total of another 32. That will be shared between the Cathay Pacific and HK Express fleet. From 2027, our six A350 freighters will start to come in. Followed by 2028, we have also announced that we will be purchasing 30 of these new generation regional wide-body aircraft. Not only are we going to invest in new generation aircraft, more importantly, we will continue to elevate our customer experience. Again, these are some of the programs that we have announced already and which we have very firm plans to implement. I have just mentioned about the Aria Suite. Not sure if you all got a chance to see it already.
If not, we are having a roadshow currently in Pacific Place where you can experience firsthand what Aria and also the new premium economy class cabin is like. We have started flying this particular aircraft around in the fourth quarter of 2024 and receiving very positive feedback. So in 2025, we will be taking more deliveries of this new cabin, and then we will start to fly them on the long-haul routes as well. From 2026, we have also announced that on our regional A330 aircraft, we will be retrofitting or replacing the current recliner seats in business class with regional flat bed. I think that will be very welcome news to our customers. On 777-9, albeit it's going to be postponed, we are not going to stop our investment in there.
Really, the world-leading first class will appear on this fleet as planned, so something to look forward to. 2025 will be a very busy year for our lounge investments. I think it's a record year where we have actually three major lounges which will be launched. In Beijing, a very strategic port of ours, we expect to have our new lounge during summer. In New York, finally, we are going to have our own six signature lounge. We are currently looking at either end of this year or beginning of next year where we will have our brand new lounge. Again, New York is a very strategic port of ours. We have a lot of front-end and corporate travelers. I think this will be a very welcomed addition to them.
Closer at home, we have all these good lounges or very award-winning lounges in the Hong Kong International Airport. But some of them are starting to get a little bit aged, and so we will start our retrofitting or refurbishment plan very soon. In fact, I think for you who travel very frequently, you see that in around the gate 40-ish area. We have already started to renovate The Bridge, one of our lounges before, and that will be opened when we start to close The Wing in the end of quarter one this year. The Wing first will be the first lounge that we refurbish in HKIA, and at that time, we will open The Bridge in order to handle the spill of our passengers.
Then going on, and then through the next few years, we will progressively also refurbish the other lounges at Hong Kong International Airport as well. I think all these lounges are part of the HKD 100 billion investment that I just mentioned about. On top of our fleet products, other parts of the customer experiences, which include a lot of digital investments, sustainability investments. I think that will continue across not just on our premium travel line of business, Cathay Pacific, but we are also investing heavily in the cargo business, in lifestyle business, and of course, in the LCC as well. I think our vision is very simple, or we are all very clear. We want to be the best in each of the four lines of business that we operate in.
We want to be the best premium carrier for Cathay Pacific, the best air cargo carrier for Cathay Cargo, the best lifestyle program for our Cathay membership program, and the Asian's best LCC for HK Express. We are very determined to reach these positions, and we will continue to put our full dedication and efforts behind those. On that note, let me pass on to Rebecca.
Thank you, Lavinia, and Happy New Year, everyone. Over the next 15 minutes or so, I will summarize our operating performance over the 11-month period to the end of November 2024, and I will provide a few comments on our financial rebuild completion and the outlook going forward. If I start with Cathay Pacific, our premium travel line of business. This slide sets out the 2024 figures to November, and compares them with the November 2023 numbers. We have also included the first half of 2024 figures that we shared with you in August. The robust travel demand continues, and you can see on this slide here, the step change in our capacity. Our available seat kilometers increased by 31.5% over the 11-month period to November 2024 compared to the 11-month period to 2023.
That is as a result of continuing to add the passenger flights and destinations that Lavinia was mentioning. We also, in the first 11 months of last year, carried more than 20 million passengers. Again, a big step change from the same period in 2023, so a 27% step change. For the first time since the pandemic, back in July, we carried more than 2 million passengers for the month, and that was repeated in a number of months in the second half of last year. The next slide, which those of you who follow our presentations will be familiar with, sets out the capacity and load factor in six-month periods. We have added the five-month period as the last bar on this chart for 2024, up until November again.
You can see that the demand remains healthy, with the load factor in the July to November 2024 period more than 1% higher than the first half of 2024. So continue to have strong demand. If I then turn to our low-cost carrier, HK Express, they were recently acknowledged as the world's fastest-growing airline of 2024. This was by OAG, which is a global travel data provider. The reason for that is a reflection of their 165% level in terms of flight frequencies, if you compare that with their pre-pandemic levels. They were serving 29 destinations by the end of the year and added nine during 2024. So a significant growth for HK Express during 2024. In terms of passenger numbers, they carried their six millionth passenger on the last day of last year.
Now, as we mentioned back in August, in the short-haul sector, the regional market that HK Express operates, there continues to be strong competition. As part of the growth strategy in this sector for us, the team have been incentivizing the market with some low-fare tactical promotions in order to support this capacity that we have been adding and stimulating interest for the new destinations that we are adding. HK Express, also, as we note on this slide here, welcomed the delivery of eight Airbus A320neo aircraft in 2024, which brings their total fleet to 41 aircraft. In terms of fleet, you will recall me mentioning back in August that the Pratt & Whitney engine, the geared turbofan that goes on the A320neo aircraft that they operate, continues or has some problems. It is a global issue, so it is affecting the global fleet.
With limited repair facilities globally, this is taking some time for Pratt & Whitney to resolve, and therefore, a significant portion of their fleet, in terms of A320neos, that has been affected, and therefore they have not been able to operate. They have been out of service. That is obviously continuing to impact the business. So overall, it has been a challenging second half for HK Express as they continue to grow.
They are obviously working on driving and improving efficiencies. As we say, the short-haul market has normalized and competition is strong. However, we are very confident in the long-term potential and strategy for HK Express, and it is an important part of our group strategy in terms of the dual brand, so the premium airline are very focused on one sector and the low-cost carrier on another sector. They are very much part of our growth strategy going forward.
In terms of Cathay Cargo, this slide will set out the metrics similarly presented to those for our passenger business. So November year-to-date 2024, compared to November 2023 year-to-date, plus the first half 2024 figures. Our cargo line of business has seen solid performance. It continues to perform well, and we have seen, as you can see on this slide, approximately a 9% increase in capacity for the 11-month period. That is primarily driven by the passenger belly. So as we increase the passenger capacity, the bellies of those aircraft are used to carry cargo, and therefore that is increasing the cargo capacity that we have. Furthermore, across the same period, we saw an 11% increase in the actual amount of cargo carried. This is driven by the solid support from the e-commerce business, particularly from the Chinese mainland to Americas and Europe.
The next slide, again, similar to the passenger slides, the six-month periods dating back to 2019 first half, with the five-month period for 2024 to end of November as the last bar on this chart. Load factors have remained at similar levels to the first half of 2024 in the five-month period from July to November. This is reflecting a very strong outbound demand from Hong Kong, as I mentioned previously, to the Americas, to Europe. For lifestyle, this is putting aside the loyalty program. This is a small part of our portfolio at the moment, and we are continuing to try and develop this portfolio or line of business and work on further opportunities in order to grow it as part of our long-term strategy. Then we turn to other subsidiaries and major associates.
Our airline service subsidiaries, that is things like d ining, ground handling, the laundry, et cetera, they have all been seen improving performance as the business resumption of the airline continues. Then if I turn to our associates, Air China is, of course, the largest associate, and you will recall that we include their figures three months in arrears. The 12-month period to the 30th of September 2024 is the set of numbers that will be included in our full-year 2024 result. Air China publishes quarterly figures, so you can get an indication of the improvement in their result, as we referred to back in August when we presented the half year numbers. Additionally, as was announced relatively recently, Air China issued A-shares on the 10th of December, which resulted in our shareholding being reduced down to 15.09%.
As a result, similar to, you will recall, in 2023, we had a gain on deemed disposal under the accounting treatment of about HKD 0.5 billion , and that will be included in our full-year result for 2024. I have mentioned before our sustainability journey, or in fact, the sustainability journey for aviation is very challenging. We believe that real progress can only be made working with all the different stakeholders involved, so governments, industry bodies, suppliers, customers, and other airlines. I am happy to share a number of milestones that we have achieved in the second half of last year with respect specifically to our corporate sustainable aviation fuel program, and we set those out on this slide. This program is whereby corporate partners will make an investment or make a payment for the premium on that we need to pay for sustainable aviation fuel.
Above jet fuel, you are paying a premium for SAF, as we refer to it. Corporates that contribute to that premium then can have it recognized as Scope 3, as a way of offsetting their emissions. It is great to see some of these additional partners that have joined us, and probably the highlight was the deal with HSBC and EcoCeres here in Hong Kong as an initial landmark deal, for them to uplift a number of tons of SAF produced by EcoCeres on board our Cathay Pacific flights out of Hong Kong International Airport. My final slide in this section is on the financial rebuild. Lavinia talked about the completion of rebuild in terms of flights and people earlier. Here, we are setting out the financial elements. A lot was achieved in 2024.
We set out the milestones here in terms of repaying the government, and also starting or commencing paying dividends for our ordinary shareholders. Since I presented this back in August, the additional activities that we have undertaken has been to buy back the warrants, which happened in September 2024. Those were owned by the Hong Kong SAR Government and issued back in 2020 as part of the recapitalization. We were able to buy those back. We, of course, paid the interim dividend that we announced in August, so that was the first interim dividend for the 2024 full-year results. Then in December, we were able to repurchase just under 70% of the convertible bonds that we had issued back in early 2021. All of these, particularly the warrants and the convertible bonds, were reducing dilution risk for our ordinary shareholders.
They were part of our COVID chapter, if you like. Having the confidence in our business prospects going forward has enabled us to be able to repay these or buy them back. The achievement of these milestones therefore really closes the chapter for our financial rebuild, which is a great thing to be able to share with you today. Briefly looking forward. Continuing on the financial theme, as you may know, those of you who follow us for some time, historically, the second half of the year is the stronger of the two halves for the Cathay Pacific Group. It was in 2023, and 2024 is no exception. We are projecting a strong second half consolidated result for the group overall. The key drivers for this are elevated cargo demand.
Also we see, and I am sure you will be familiar, the fuel price was lower in the second half of 2024, which is always helpful for aviation businesses, of course. These positives, in terms of cargo and fuel, were offset to some degree by the continued normalization of yields. We talked about this back in August, whereby the short-haul sector had pretty much normalized, but the long-haul sector, or part of the business, still we expected to have some further normalization in yields, and that has definitely been the case. In terms of liquidity, we continue to maintain healthy levels of liquidity, but they are lower than the elevated levels we maintained through the pandemic due to the level of uncertainty during that time. In fact, they are going back to somewhat similar to the levels we carried before the COVID-19 pandemic.
In terms of travel, so outlook for our premium travel line of business, Cathay Pacific, and our low-cost carrier, HK Express. The recent commissioning of the Three-Runway System heralds a new phase of growth and development for Hong Kong International Aviation Hub. As Lavinia has already mentioned, in connection with this, we reach a milestone this year of 100 destinations for the Group across Cathay Pacific and HK Express. Of course, the latest announcement yesterday of the seasonal service to Rome. In terms of yields, as I have mentioned, they have normalized in the short-haul, the regional market, and we are expecting long-haul capacity or supply to continue to increase this year, and therefore yields on the long-haul sector to continue to normalize somewhat.
Additionally, we are expecting the network mix to change a little bit in terms of more sixth freedom or transit passenger traffic with the increasing long-haul capacity. As I have said many times, the other element that we still have with us is the challenges in the supply chain. Resources, servicing, and indeed production of new aircraft from the original equipment manufacturers, are all impacting capacity in the aviation sector, and continue to do so. For cargo, as I have mentioned, the cargo demand remained strong in the second half of 2024. The cargo market dynamics are somewhat changeable. They are more closely linked to the global economy. Things, for example, currently in the news about tariffs, et cetera, will all potentially impact in different ways.
The way we want to tackle this and continue to tackle this is we monitor the situation closely, and we're agile in our network planning such that we can adapt to what our customers need. If I can summarize, I'm pleased to say that our two-year rebuild chapter is now closed, and we're very firmly focused on truly becoming a Cathay that is better than we were before. In terms of the financial results, we're projecting a strong second half consolidated result for 2024, which is greater than the first half result. We're already back at 100% of flight frequencies this month compared to pre-pandemic levels, and will achieve 100 destinations for the Group during the course of 2025.
As previously announced, and Lavinia talked to earlier, we're committed to an investment of over HKD 100 billion over the course of the next seven years in terms of fleet, more than 100 aircraft, which of course is the biggest portion from 2024, investment in lounges and cabin products, and also in sustainability and digital as we improve customer experience and back office stuff as well. Now, before I close, a few items that you always ask me about, so I will cover them off now. Firstly, fuel hedging. There's no change to our fuel hedging policy. You'll remember from the briefing back in August, we had about 30% of our fuel hedged for the second half of last year.
Also to note the current fuel prices, second half fuel prices, being at somewhat lower levels is helpful to our business and the aviation sector as a whole. Secondly, interest rates. It's good to see these coming down, although that's slowing a little bit. But as you have asked me before, we typically, and as presented in August, roughly have about half of our debt on fixed rates versus floating. Thirdly, dividends. Our dividend policy is for ordinary shareholders, for us to distribute approximately half of our consolidated profit after tax. We exclude non-cash exceptional items. Of course, it's subject to considerations at the time in terms of the economic circumstances, et cetera. But there's no planned change to that either.
In conclusion, with the closure of our rebuild chapter behind us, this is an exciting new era for Cathay, underpinned by our determination to be a positive force for Hong Kong, for the Chinese Mainland, and for the rest of the world. Thank you.
Thank you for your presentations, and also thank you, Rebecca, for already addressing some of the questions.