Cathay group 2023 cargo revenue down 16%
Cargo carried increased 20% to 1.4 million tonnes, yield down 41% to HK$2.74
Photo Credit: Cathay Pacific
Cathay Pacific group reported a 16 percent decline in cargo services revenue at HK$25.6 billion for 2023 on 41 percent decline in yield at HK$2.74 offset by a 40 percent increase in cargo traffic (8.1 billion vs 5.8 billion in 2022).
"It was notable, however, that yields were still 46.5 percent above 2019 pre-pandemic yields," says an official release.
While capacity increased 60 percent to 13.1 billion (available cargo tonne kilometres), cargo carried increased 20 percent to 1.4 million tonnes from 1.2 million tonnes in 2022. Cargo load factor was down 8.6 percentage points at 62 percent.
"Our cargo business also benefited from our increased passenger flight schedule with more belly space for cargo shipments and more options for our customers. By the end of 2023, we had restored 85 percent of our pre pandemic cargo flight capacity. The market normalised compared to the past couple of extraordinary years. However, it remains strong, and we enjoyed a particular bright spot in e-commerce. Hong Kong continues to be the busiest international air cargo hub globally, and Cathay Cargo the largest operator out of the hub."
Cathay Cargo’s revenue in 2023 decreased 18 percent to HK$22.2 billion compared with 2022, the release added.
Although traditional air cargo commodities such as high-end electronics were weaker for a large part of 2023, the e-commerce sector from Southern China emerged as a key driver of cargo tonnage growth from Hong Kong throughout 2023. Demand was particularly robust during the traditional year-end peak season in the fourth quarter, the release added.
"However, we expect trade flow directional imbalances to persist, impacting overall load factors. Moreover, as the air cargo industry continues to normalise, yields will decrease in 2024 but are expected to remain above 2019 levels."
Cathay Cargo became the first carrier to have cargo shipments accepted at the Hong Kong International Airport (HKIA) Logistics Park in Dongguan and transported to HKIA by vessel for outbound airfreight, the release added. "The HKIA Logistics Park’s pilot scheme in Dongguan enables shipments to be security screened, built up, and accepted as cargo for flights before being loaded onto vessels bound for HKIA from where pallets and
containers can be towed straight to a waiting aircraft. Air-sea operations for imports were launched in December. The scheme’s base will migrate to a permanent facility from 2025.
"With our double-daily passenger belly service to Guangzhou and trucking network between Hong Kong and six destinations in Guangdong Province, we have rebuilt our connectivity between Hong Kong and the GBA."
As of December 31, 2023, Cathay was operating freighters serving 11 destinations and passenger bellies serving six destinations in the Americas. "We were operating freighters serving five destinations and passenger bellies serving eight destinations in Europe. As we increased our passenger flights to Japan, South Korea and the Taiwan region, we observed an increase in cargo tonnage to Hong Kong with notable growth in perishables, automotives, and dangerous goods. We were operating freighters serving nine destinations and passenger bellies serving nine destinations in North Asia."
Group revenue zooms 85%
Cathay Pacific group reported an 85 percent increase in revenue at HK$94.5 billion and profit came in at HK$9.8 billion compared to a loss of HK$6.6 billion in 2022.
"In 2023, we finally left the Covid-19 pandemic behind us," says Patrick Healy, Chair, Cathay Group. "In welcoming this new phase, our purpose to move people forward in life” has been foremost in our minds. Our primary focus has been on rebuilding Cathay for the benefit of our customers, our people, our shareholders and the Hong Kong international aviation hub. I am pleased to report that we achieved our end-2023 Group target of operating 70 percent of pre-pandemic passenger flights, connecting Hong Kong with around 80 destinations around the world.
"Our strong 2023 result has allowed us to announce our first dividend payment to ordinary shareholders since 2019. This strong financial performance has also allowed us to recognise and reward the efforts of our dedicated team; make commitments regarding significant capital investments in our fleet, products and service; and to begin to repay the support provided by the Hong Kong SAR Government for our recapitalisation in 2020, for which we are deeply grateful.
Looking ahead
"We will reach 80 percent of our pre-pandemic passenger flights within the second quarter of 2024. As we continue to rebuild our flights, we expect the supply and demand imbalance experienced in 2023 to diminish, and the normalisation of yields seen in recent months to continue throughout 2024.
"Our priority in 2024 is to ensure high-quality and sustainable growth as we prepare for the full operation of the Three-Runway System at Hong Kong International Airport by the end of this year. This milestone marks an exciting new chapter in the growth of our home hub and opens up a wide range of opportunities. Our investments will span our fleet, our customer experience and our people."
Ronald Lam, CEO, Cathay Group says: "In 2024, we plan to expand our workforce by around 20 percent or 5,000 people compared with 2023. Furthermore, we are significantly increasing our training activities in 2024, more than doubling the levels seen in 2023."
