Cathay tackles capacity challenges as tonnage holds steady in May
14 / 06 / 2022
Cathay Pacific Cargo B747F
Covid-19 restrictions in Hong Kong have reduced Cathay Pacific’s passenger services to a fraction of pre-pandemic capacity and severely limited its cargo capacity into the bargain as it claws back capacity.
Cathay Pacific carried 92,426 tonnes of cargo in May – very similar to the same month of 2021, but 45.1% less than the pre-pandemic total seen in May 2019.
Cargo revenue tonne kilometres (RFTKs) fell 32.5% year on year and were down 59.9% over May 2019. The load factor dropped 5.3 percentage points to 75.7% and capacity measured in available cargo tonne kilometres also fell, decreasing by 27.7% compared to May last year and down 66.1% on the 2019 figure.
Chief customer and commercial officer Ronald Lam said the situation in relation to Covid-19 in Shanghai continued to affect demand in May, although tonnage has picked up gradually as restrictions have begun to ease.
“As for Hong Kong, volumes improved as cross-border feeder services between Shenzhen and Hong Kong allowed for a more stable flow of cargo, although it remains below the capacity available prior to the fifth wave of Covid-19,” he went on, noting that demand from other parts of Cathay’s network remained “relatively strong” throughout the month.
“Given a strong underlying cargo performance coupled with our cost management measures implemented over the past two years, our consolidated losses in the first half of 2022, while substantial, are expected to be lower than the consolidated losses reported in the first half of 2021,” he added.
Lam also pointed to the Hong Kong government’s extension of the drawdown period of a HK$7.8bn loan facility for a further 12 months, to 8 June 2023, which will “provide us with the flexibility to manage our liquidity position”.
Meanwhile, Cathay has been adding long-haul freighter services on transpacific and European routes, with a full freighter schedule operating from June. Increased passenger flight frequencies, as well as cargo-only passenger services, will provide additional capacity as global travel opens up further. The airline is aiming to double its passenger destinations from 29 at the start of 2022 to 58 by year-end.
“With disrupted supply chains in Shanghai and elsewhere in the world, the short-term outlook for our air cargo business remains positive, whilst we currently remain confident for a solid traditional peak season later this year,” Lam concluded.
Last month, Cathay Pacific continued to restore its freighter network with the addition of flights to Amsterdam Schiphol, Paris CDG, London Heathrow, Dubai, Riyadh and Phnom Penh.
May also saw the expansion of Cathay’s joint business agreement with Lufthansa Cargo to include Swiss WorldCargo. Plus, its Cargo and Lifestyle businesses have developed a solution to deliver fresh fruit and vegetables from producers in northeast Asia direct to customers’ homes.