Cathay Pacific: Air freight shows signs of improvement

Oct 21, 2019: Cathay Pacific’s cargo business is showing signs of improvement in September compared to August as the Hong-Kong based airline says ‘it steps into air freight’s traditional high-demand season’.

Cathay Pacific Group reported that Cathay Pacific and Cathay Dragon together carried 172,637 tonnes of cargo and mail last month, a drop of 4.4 percent compared to the same month last year.

The cargo and mail load factor fell by 3.7 percentage points to 65.5 percent. Capacity, measured in available freight tonne kilometres (AFTKs), was up by 0.1 percent while cargo and mail revenue freight tonne kilometres (RFTKs) dropped by 5.3 percent.

Cathay Pacific Group reports 14% fall in August cargo; announces capacity cuts

Ronald Lam, chief customer and commercial officer, Cathay Pacific said: “Most markets saw a better month-on-month performance and we mounted a number of charter operations on top of our scheduled services to meet added demand for air freight coinciding with the release of new electronic products. However, the overall market remains challenging and competitive with tonnage carried and load factor for the year to date still significantly below the same period last year.”

However, the passenger business witnessed another challenging month in September. The revenue was adversely affected by weakened market sentiment, particularly for travel into Hong Kong.

The two airlines carried a total of 2,426,961 passengers last month, a drop of 7.1 percent compared to September 2018.

Passenger load factor decreased by 7.2 percentage points to 73.6 percent, while capacity, measured in available seat kilometres (ASKs), rose by 9.8 percent.

Ronald Lam added: “The mainland China market has been hit especially hard and we observed very weak demand for travel over the National Day holiday (October 1 to 6) – traditionally a very strong period. Our India routes were the main bright spot, buoyed by strong demand between India and North America. Intense competition together with an increasing reliance on transit passengers over the short term has continued to apply additional pressure on yield.

“We continue to see a significant shortfall in inbound bookings for the remainder of 2019 as compared to the same snapshot last year. This has been felt most strongly with bookings from mainland China and our other Asian markets. As previously announced, we are taking a number of short-term tactical measures to respond to this shortfall, most notably realigning capacity for the winter season (from end October 2019 to end March 2020).”

Last month, the airline said it would introduce short-term capacity cuts, due to significant decline in forward bookings for the remainder of the year.