Cathay Pacific sees weakening demand hit load factors
14 / 07 / 2015
Cathay Pacific and Dragon Air saw air cargo load factors weaken in June as "sporadic" demand out of mainland China conspired with capacity additions to push down utilisation levels.
The Hong Kong-based carriers saw volumes in June increase by 2.3% against last year to 836m revenue tonne kms.
While it was the airlines’ strongest June since at least 2011, the pace of growth has slowed drastically as the year has progressed, with its average percentage increase for the year in terms of demand coming in at 12.2%.
Cathay Pacific general manager cargo sales & marketing Mark Sutch blamed stiff competition and weakening demand in mainland China.
“Growth in the cargo markets has been softening as the year has progressed and we saw a continuation of this trend in June.
"Last month’s tonnage growth was almost flat year on year and fell well short of the increase in capacity in percentage terms.
“Traffic out of the home market was generally steady but demand out of Mainland China was more sporadic, and was again affected by strong competition.”
Meanwhile, capacity increased by 5.9% year on year in June to 1,333 available tonne kms. This resulted in load factors slipping to 62.7% compared with 64.9% last year.
However, the figure was an improvement on the 62.1% load factor recorded in May.
Cathay did cut capacity on certain routes to try and help offset the weakening demand.
Sutch said: “Leveraging our strong network in southeast Asia helped maintain traffic flows on our transpacific services and we did not trim capacity on these lanes.
“Conversely, demand from Asia to Europe remained weak and we pared back freighter services on these routes, relying instead on our extensive passenger aircraft belly lift.”
Cathay Pacific & Dragon Air cargo tonne kms (m)
Cathay Pacific & Dragon Air available tonne kms (m)
Cathay Pacific & Dragon Air load factor (%)