Cathay Pacific Group sees 7% fall in cargo and mail figures in February; posts HK$2 bn overall loss

Mar 18, 2020: The Cathay Pacific Group reported a significant hit in its cargo, mail and passenger figures for February 2020 from the coronavirus outbreak. The group posted an overall unaudited loss of HK$2 billion for the month.

The two airlines (Cathay Pacific and Cathay Dragon) carried 118,711 tonnes of cargo and mail last month, or 698,019,000 revenue freight tonne kilometres (RFTKs) – a decrease of 6.9 percent compared to the same month last year. The cargo and mail load factor increased by 5.8 percentage points to 66.6 percent, while capacity, measured in available freight tonne kilometres (AFTKs), was down by 15.1 percent.

Cathay Pacific, group chief customer and commercial officer, Ronald Lam said, “We are facing an unprecedented challenge as the COVID-19 pandemic continues to cause widespread disruption to our operation and business. In February alone, we made a significant unaudited loss of more than HK$2 billion at the full-service airline level (Cathay Pacific and Cathay Dragon).”

“The situation has further deteriorated since February. We have already announced around 65 percent passenger flight capacity reduction for March. Governments around the world have since introduced more travel restrictions, with the most recent ones starting to affect our major long-haul markets including Europe, the United States and Southwest Pacific. Given the expected further drop in travel demand, we are planning to only operate a bare skeleton passenger flight schedule for April, which represents up to 90 percent capacity reduction,” Lim added.

“If we do not see a relaxation of travel restrictions in the near future, we expect the same arrangement will have to continue into May,” he said.

While the carrier’s freighter capacity remains intact, the reduction of its passenger flights has had a significant impact on its overall cargo capacity as well as its ability to carry cargo to destinations only served by our passenger flights. However, we remain flexible in deploying additional cargo capacity, including mounting additional freighter flights as well as cargo-only passenger flights.

“The prolonged Chinese New Year holiday together with efforts to contain the coronavirus outbreak in early February led to a delay in the resumption of production in mainland China. Demand for outbound airfreight from the mainland and Hong Kong only began to recover progressively from mid-February,” he said.

In contrast, there was an overflow of demand for cargo services into mainland China and Hong Kong partly due to significant capacity cutbacks and a surge of pharmaceutical-related orders. The carrier’s cargo load factor grew 5.8 percentage points with stable yield in February when compared with last year.

“The scale of the challenge we are currently facing is unprecedented and no one can predict when conditions will improve. Our advance passenger bookings show no clear signs of recovery at this stage, and the gap in bookings compared to 2019 continues to widen,” Lim warned.

“We already made it known last week that a substantial loss in the first half of this year is expected. Nevertheless, Cathay Pacific is a resilient company and we remain confident in the future of the company, of Hong Kong as an aviation hub, and in our ability to thrive in this region over the long term,” he concluded.