Cathay Pacific cargo capacity to be hit by new Covid requirements

Cathay Pacific has warned that new Covid-19 requirements for pilots and crew will result in its cargo capacity being reduced by around a quarter.

The Hong Kong-headquartered airline said that in February, the Hong Kong Special Administrative Region (SAR) government will implement a new 14-day hotel quarantine plus 7-day medical surveillance requirement for both its Hong Kong-based pilots and cabin crew.

Cathay Pacific Group chief customer and commercial officer Ronald Lam said: “The new measure will have a significant impact on our ability to service our passenger and cargo markets.

“The actual extent of such impact is yet to be confirmed and will be affected by a number of factors, including the success of mitigation measures we are able to adopt, such as agile manpower resources management.

“At this stage, our preliminary assessment is that the new measure may result in a reduction of current passenger capacity of around 60%, a reduction of current cargo capacity of around 25% and a further increase in our cash burn of approximately HK$300m-HK$400m per month, on top of our current HK$1bn-1.5bn levels.”

The carrier warned of the impact of the new measures as it reported its performance figures for December.

December cargo volumes were down 23.7% year on year to 747m tonne kms, while a 36.9% reduction in capacity to 931m available tonne kms pushed up the cargo load factor by 13.9 percentage points on last year to 80.3%.

Lam said: “Cargo had a relatively good finish to 2020, in line with the overall positive performance seen in the second half of the year.

“December tonnage was up month-on-month by about 3%, with exports from the Chinese mainland and Hong Kong holding up for longer than is normally expected at the end of the year.

“The overall buoyancy of the market ensured that load factors continued to grow, averaging 80.3% in December – the highest monthly average in 2020.

“The imbalance in the market between demand and available capacity created an ongoing need for cargo-only passenger flights prior to Christmas, and overall in December we operated 713 pairs of these flights – only slightly fewer than in our peak month of November.

“Network traffic feed from Northeast Asia and the Southwest Pacific was also encouraging with good movements of priority cargo and special products. We launched a seasonal cargo service into Hobart, Australia last month transporting high-quality fresh produce from Tasmania’s capital city to various parts of Asia.

“We also launched a new scheduled freighter service between Hong Kong and Riyadh in January to meet the strong demand for shipments of e-commerce and other general cargo such as garments.”