Cathay Pacific highlights growth opportunities and challenges
24 / 01 / 2023
Tom Owen, Cathay Pacific Cargo
Express, e-commerce and temperature sensitive shipments will be beacons of light in a cloudy operating landscape, according to Cathay Pacific Cargo’s leader.
Director of cargo Tom Owen said that the shift in supply and demand “will lead to a dampening in our revenues” but these three business areas represent “strong pockets of opportunity”.
“Even in this transition period, there will be strong pockets of opportunity – a weak market is not always weak everywhere at the same time,” he pointed out.
The return of belly capacity will put pressure on yields but it will also enable increased tonnage, he said.
“There’s no doubt that more passenger flights will lead to increased capacity and therefore some pressure on yields. But then some of these markets have been very under-served by widebody carriers, so there will be opportunities for increased tonnage.
“Our network returning will allow us to gain back some market share, particularly around the Greater Bay Area, and on to long-haul markets like the US and Australia. We hope to increase our tonnages quite significantly, so it’s by no means all negative.”
In fact, yields on many of the airline’s air cargo trade lanes currently remain in a good position.
“The boom years we had in air cargo because of supply chain issues and challenges to ocean shipping are behind us. Air cargo that would otherwise have gone by sea will revert back, and rates are beginning to normalise,” said Owen.
“But there is still cargo that needs to travel by air, and that will be our focus. Yields also remain elevated on many of our air cargo trade lanes from the immediate pre-Covid period.”
Challenges include economic headwinds in Europe, Australia, the US and the Chinese Mainland, but Owen said the opening of the Chinese Mainland to the world again is very encouraging.
Investments across a number of different areas are planned for the business this year, and include enhancing the cold chain offering with improvements to its Fresh LIFT solution.
Cathay will also relaunch its regular and express mail solutions, improve its dangerous goods solution for customers, and is applying for IATA’s CEIV Lithium Battery accreditation.
It is also considering increasing the adoption 0f carbon offsets, looking at how to further reduce waste across its land-based operations and introduce more freight forwarders and shipper partners into its Corporate SAF programme.
Additionally, the airline is working with authorities to be able to carry e-cigarettes again from Hong Kong.