"We want to be the world's best air cargo carrier."

"Air cargo is a wonderfully dynamic business. It changes regularly and pivots quite substantially," says James Evans, General Manager, Cargo Commercial at Cathay Cargo. "But from a Cathay perspective, there are a couple of things that remain true. Hong Kong is the epicentre of global manufacturing, and Hong Kong International Airport (HKIA) is the world's number one international air cargo hub. The network, frequency, connectivity, operational capability, specialised solutions and expertise all combine to make Hong Kong a very compelling proposition for exports, imports and transshipments."

Those structural advantages continue to translate into strong commercial performance. Despite persistent market disruptions, Cathay Cargo reported a 24% year-on-year increase in revenue to HK$13.81 billion in the first half of 2026, while cargo volumes rose 8.5% to 869,000 tonnes,

According to Evans, the Chinese mainland continues to provide a solid demand base, while Southeast Asia has become an increasingly important contributor as manufacturers diversify production footprints under "China +1" strategies. The airline has responded by redeploying capacity where customers need it most. "We've had to adjust and adapt ourselves very quickly," he says. "In May, we resumed our freighter service to Bangkok, providing additional capacity. We've also upgraded passenger services to Bangkok by deploying widebody aircraft instead of narrowbody aircraft, giving us more belly capacity. In the fourth quarter this year, Air Hong Kong will introduce an A330 passenger-to-freighter (P2F) converted aircraft, strengthening regional lift across Southeast Asia, South Asia, and parts of the Middle East."

Cathay Cargo currently operates 33 to 38 freighter flights a week to the Americas, one of its strongest-performing markets. "Demand for our capacity remains very strong," Evans says.

E-commerce remains a structural growth engine
While regulatory changes surrounding de minimis rules in both the United States and Europe have generated considerable discussion across the industry, Cathay Cargo does not view them as a threat to long-term e-commerce demand. Instead, Evans believes consumer behaviour has fundamentally changed, making e-commerce an enduring source of cargo growth.

Being located in Southern China gives Cathay Cargo direct access to one of the world's largest concentrations of manufacturing and fulfilment centres, positioning Hong Kong as a natural gateway for global online retail shipments. "E-commerce has been a big story over the past few years," he says. "A lot of manufacturing and distribution centres are based in Southern China, and we're naturally positioned to connect those shipments through Hong Kong into key global markets."

Although recent regulatory measures have prompted concerns that e-commerce volumes could shift away from traditional markets, Evans believes businesses have consistently demonstrated an ability to adapt. The Americas continue to represent Cathay Cargo's largest e-commerce market.

"Last year, we saw e-commerce flows into the Americas soften for a period, but they recovered quickly. Businesses adapt remarkably fast, whether that's shifting between business-to-consumer and business-to-business models or adjusting supply chains. Consumers adapt as well." For Cathay Cargo, e-commerce therefore remains a long-term growth story rather than a short-term opportunity.

“Unlike traditional electronics shipments, much of this AI infrastructure equipment demands specialised handling throughout the transport chain. We've seen a rise in demand for our specialised handling solutions."
James Evans, Cathay Cargo

The AI boom is creating a new premium cargo market
Alongside e-commerce, another cargo segment has emerged as one of the industry's defining growth drivers: artificial intelligence infrastructure. The unprecedented investment being made by global technology companies in AI data centres is translating directly into air cargo demand, particularly for high-value hardware such as servers, CPUs, semiconductors, and server racks that require rapid and specialised transportation.

"The technology boom is another major story," Evans says. "When you look at the hyperscalers such as Meta, Google, Microsoft, and Amazon, they're talking about investing hundreds of billions of US dollars every year in AI infrastructure."

Unlike traditional electronics shipments, much of this equipment demands specialised handling throughout the transport chain. "We've seen a rise in demand for our specialised handling solutions," he explains. "Some of these products require extremely careful handling. Using our digital capabilities, we minimise the transit time between the cargo terminal and the aircraft and ensure these very valuable shipments move safely and efficiently." Beyond AI infrastructure itself, Evans points to broader growth across consumer electronics, laptops, and other technology products that continue to move through Cathay Cargo's general cargo network.

From Cathay Cargo's perspective, the strongest AI-related cargo flows currently connect Southeast Asia and Northeast Asia with the Americas, particularly markets such as Taiwan and Japan. While freight forwarders work directly with technology manufacturers, Cathay Cargo collaborates closely with them whenever specialised handling is required.

The rapid expansion of AI-related exports has also required the airline to continually reposition its network. Evans notes that while "China +1" has existed as a strategy for many years, the speed of manufacturing shifts over the past year has accelerated dramatically. Production has expanded across Thailand, Vietnam, Malaysia, and other Southeast Asian markets, requiring airlines to react quickly.

"We've rapidly redeployed capacity, restored freighter services, upgraded passenger aircraft, and increased capacity into Southeast Asia. What has impressed me most is how agile both manufacturers and the logistics industry have become."

He points to market data illustrating just how quickly the sector is expanding. "High-tech exports from Taiwan grew around 60 percent between 2024 and 2025, and during the first five months of this year, growth approached 120 percent. Our customers have experienced that growth directly, and we've had to reposition our network accordingly."

For Evans, the achievement is not simply that Cathay Cargo captured the opportunity, but that it responded at the pace required. "I'm particularly proud of how quickly our team has adapted to these changing market conditions."

Strong demand has also translated into healthy commercial performance. Freight rates have remained resilient throughout the year despite higher operating costs, particularly rising aviation fuel prices triggered by geopolitical developments.

Evans explains that Cathay Cargo had to adjust fuel surcharges more frequently across Hong Kong and other key markets as jet fuel prices climbed sharply during the first quarter. "We worked closely with freight forwarders to explain what was happening and why," he says. "The higher fuel surcharges increased overall freight rates, but demand has remained strong and market rates have held up well."

Capacity utilisation tells a similar story. "Our freighter load factors on the key trade lanes into the Americas have consistently been well into the 90% range," Evans says. "Strong network connectivity feeding into Hong Kong and sustained demand on those long-haul routes have enabled us to maintain very high utilisation throughout the year."

Building capacity for the future
If demand is one half of the air cargo equation, capacity is the other. While strong cargo volumes have supported healthy yields across the industry, airlines now face a different challenge: how to secure enough aircraft to support future growth in an era of manufacturing delays and record order backlogs.

In May 2026, Cathay Cargo expanded its Airbus A350F order from six to eight aircraft after exercising purchase rights for two additional freighters. Evans says that A350 freighters represent growth rather than replacements. "The A350 freighters are a purchase for growth," Evans says. "We'll keep our Boeing 747 freighters. The A350s will join the fleet as incremental capacity."

Cathay Cargo expects the first A350 freighter to enter service during the fourth quarter of 2028, with deliveries continuing into the early 2030s. Until then, the airline expects its Boeing 747 fleet to remain the backbone of long-haul freighter operations.

Over the next few years, one aircraft type will play a particularly important role in that strategy: the A330 P2F operated by Cathay’s subsidiary Air Hong Kong. "The A330s are really intended for regional feed," Evans explains. "They'll connect cargo from Southeast Asia, South Asia, and nearby markets into Hong Kong, where it can feed our long-haul freighter network."

Passenger aircraft will also contribute significantly to cargo growth. With approximately half of Cathay Cargo's capacity coming from passenger bellyhold space, fleet expansion on the passenger side directly benefits the cargo business. "We've got the Boeing 777-9 entering the fleet from next year, and that provides additional belly cargo capacity as well," Evans says.

Until dedicated freighter deliveries begin in 2028, every available aircraft will need to be deployed as efficiently as possible. "Our mission over the next couple of years is to optimise the deployment of the capacity we already have," he says.

Hong Kong remains the centre of Cathay Cargo's strategy
As supply chains become increasingly regionalised, Cathay Cargo sees Hong Kong not merely as an airport, but as the centre of an integrated logistics ecosystem. Cathay Cargo works closely with the Airport Authority Hong Kong and other stakeholders to strengthen connectivity between the airport and the Greater Bay Area. "It's incredibly important that we connect the Greater Bay Area with the rest of the world, and the world with the Greater Bay Area," Evans says.

That connectivity extends well beyond aircraft. Cargo arriving in Hong Kong can continue its journey through an extensive multimodal network that includes barges serving Dongguan, trucking services into Shenzhen, and dedicated road corridors into Zhuhai. "The Greater Bay Area isn't just a manufacturing powerhouse," he says. "It's also a huge consumer market. Our role is to make sure we're connecting it efficiently, whether that's with aircraft, barges, or trucks."

One of the most visible examples of that strategy is the Air-Land Fresh Lane, which links HKIA with Zhuhai via the Hong Kong-Zhuhai-Macau Bridge. Rather than being created solely as an airline initiative, the project emerged from new infrastructure investments and growing demand for imported fresh produce across Southern China.

Evans says the state-of-the-art temperature-controlled facility in Zhuhai was the catalyst. "The infrastructure created the opportunity," he explains. "The facility is highly advanced and allows trucks crossing the bridge to process all kinds of fresh products, whether that's seafood, cherries, durians or many other perishables."

Customer demand played an equally important role. "There was strong demand from customers across the Greater Bay Area for more options to import fresh produce," Evans says. "At the same time, exporters from North America, Southeast Asia, and Australia were looking for efficient access to that market."

Yet Evans is quick to draw a distinction between enabling multimodal logistics and changing the airline's identity. "Our vision is very clear," he says. "We want to be the world's best air cargo carrier."

"Whether it's investing in the A350 freighters, the A330 converted freighters, or expanding our passenger fleet, cargo remains a major consideration. Our focus remains on being an air cargo carrier."

The article was originally published in the August 2026 issue of The STAT Trade Times.