Cathay Pacific cargo capacity drops 25% as quarantine measures hit

Cathay Pacific saw its cargo capacity drop by 25% in March as a result of new crew quarantine measures in Hong Kong.

Writing in the airline’s monthly cargo update, general manager of cargo commercial George Edmunds said the new crew quarantine measures were the biggest obstacle faced to normal cargo operations.

The new measures, introduced on February 20, mean that all Hong Kong-based crews need to quarantine for two or three weeks when returning from an international flight.

“These measures only affect airlines with Hong Kong-based aircrew and so apply to the vast majority of our pilots; therefore, there is an outsized impact on our operations relative to other carriers,” Edmunds said.

As a result, the airline flew around 25% less cargo capacity overall in March, with weekly freighter frequencies between Hong Kong and the US reduced from the usual 34 to around 21-28 flights per week.

Edmunds warned cargo capacity would fall further this month.

“This schedule is further reduced this month as crew who have volunteered for the closed-loop operation enter quarantine before a well-earned period of leave,” Edmunds said.

“The major impact of these quarantine requirements is on our long-haul routes, in particular to Europe, Southwest Pacific and the Americas.

“We have therefore looked to redeploy more freighters on regional and short-haul routes where closed-loop operations are not required.”

Rates on Hong Kong-North America routes have been rising quickly over the last couple of weeks, with Peter Stallion from air cargo derivatives broker suggesting that this is in part down to the new crew requirements out of Hong Kong.

Last week, data from the Baltic Exchange Air Freight Index (BAI) showed that average airfreight rates from Hong Kong to North America increased to $8.29 per kg, up from $4.93 per kg at the start of March.

Meanwhile, Edmunds also gave an update on new US requirements on flights from Hong Kong introduced by the US Department of Transport (DoT) in response to the new quarantine rules, which it said disproportionately affect US carriers.

The DoT reasoned that Cathay Pacific could mitigate the impact of the rules through its “large transhipment operation” in Anchorage, an option not available to US carriers with crews based in Hong Kong.

The DoT therefore ordered all Hong Kong-based carriers to file their flight schedules for all US flights within seven days, for the department to consider “the operation of the services contained in those schedules, or any part thereof, may be contrary to applicable law or adversely affect the public interest”.

Explaining the impact of the new requirement, Edmunds said: “While this adds administrative burden, it does not affect the number of flights we operate, but there may be some impact on last-minute schedule additions.

“Similarly, our freighter operations to India are being disrupted because of schedule filing issues. We are working with the authorities on a resolution to this and operating ad hoc freighters and cargo-only passenger aircraft until a full schedule is confirmed.”

He concluded: “We are acutely aware of the impact this is having on our partners and shippers. We apologise for the disruption and thank our customers for their continued support and patience.

“These are temporary issues, and once lifted we look forward to restoring our full market presence. In the interim, we are taking measures to offer as much capacity and flexibility as we can, and we will issue updates as soon as we can.”