Despite potential disruptions to global flights due to conflicts in the Middle East, Cathay Pacific has again delivered robust profitability and expects double-digit growth in passenger capacity. The Hong Kong flagship carrier announced on Wednesday a net profit of HK$10.83 billion (US$1.38 billion), up 9.5% year-on-year, largely due to a one-time gain of approximately HK$878 million from a supplier settlement. Annual revenue increased by 12% to HK$116.77 billion. The results surpassed analyst expectations, which had projected a net profit of HK$93.2 billion and revenue of HK$113.96 billion, according to Visible Alpha's consensus estimates. Following the earnings release, the company's share price surged more than 5%, extending earlier gains. The airline had previously forecast profit growth for 2025, citing increased capacity, higher load factors, and strong cargo demand. However, Cathay Pacific's chairman noted on Wednesday that normalized passenger yields and losses from its subsidiary HK Express partially weighed on profits. Net profit in the second half of the year showed strong performance, rising 14% year-on-year to HK$7.18 billion, nearly doubling compared to the first half. Annual passenger revenue grew by 16%, with the load factor increasing from 83.2% to 85.2%. Cathay Pacific expects passenger capacity to increase by approximately 10% in 2026 as it adds more flight frequencies and new destinations. The company anticipates taking delivery of eight new narrow-body aircraft this year, though it noted that supply chain disruptions and cost inflation will continue to affect the delivery of new aircraft, cabin products, and spare parts. Regarding rising fuel costs, Cathay stated it will mitigate exposure to oil price volatility in the short to medium term by hedging part of its expected fuel consumption. The chairman of Cathay Pacific remarked, "The current volatile global geopolitical environment has led to unexpected fluctuations in passenger and cargo flows, as well as aviation fuel prices."