The Cathay Pacific Group released its traffic figures for July 2020. The data reflect the substantial capacity reductions caused by a sharp decrease of the demand, as well as travel restrictions and quarantine measures adopted in Hong Kong and other markets during the COVID-19 pandemic.
1. Overview
Here are some data related to Cathay Pacific and Cathay Dragon.
July 2020:
- the number of passenger carried was 42,984 (-98.7% compared to the same month of 2019);
- the month’s revenue passenger kilometres (RPKs) fell 98.1% year-on-year;
- the passenger load factor fell down to 23.4% (- 62.6%);
- the capacity decreased by 92.9%;
- the quantity of tonnes of cargo and mail carried was 102,129 (- 39.8% compared to July 2019);
- the month’s revenue freight tonne-kilometres (RFTKs) fell 33.3% year-on-year;
- the cargo and mail load factor went up to 75.8% (+ 12.7%);
- the cargo capacity, measured in available freight tonne kilometres (AFTKs), was down by 44.5%.
January-July 2020:
- the number of passengers carried dropped by 79.4%;
- the capacity decreased by 69.9%;
- RPKs dropped by 76.6%;
- the cargo tonnage fell by 33.1%;
- cargo capacity fell by a 33%;
- cargo RFTKs decreased by 25.9%.
2. Passenger
According to Ronald Lam, Cathay Pacific Group Chief Customer and Commercial Officer, passenger numbers registered a slight improvement in the beginning of July, thanks to a boost in the number of transit passengers via Hong Kong. “We increased our passenger flights by a slight amount to approximately 7% of the normal capacity, up from about 4% in June, and gradually resumed some services to Chengdu, Xiamen, Frankfurt and Toronto,” he said.
But at the end of the month, as COVID-19 cases started to rise again, the demand decreased again. Consequently, passenger volume increased at a lower rate for July, and the load factor went further down to 23.4%. However, a few services performed better than expected (e.g. Xiamen).
3. Cargo
Cargo is the better performer of the business. Tonnage increased month-on-month by approximately 10%, but this result is significantly lower than last year’s levels due to the reduction in cargo capacity. The load factor remained high at 75.8%.
Some markets performed better than the others, in particular the Indian subcontinent, which registered a sharp increase as local lockdown measures were eased. Hong Kong and the Chinese mainland also registered positive airfreight demand results.
At the beginning of July, the airline has begun operating cargo-only passenger flights using converted Boeing 777-300ER aircraft that have had some of the seats from the Economy Class cabin removed. In this way, the airline managed to increase its cargo capacity.
4. Outlook
The global aviation sector continues to be affected by the COVID-19-related travel restrictions. The International Air Transport Association (IATA) has adjusted its previous forecast for when international passenger demand will return to pre-pandemic levels. Now IATA estimates that the demand won’t go back to normal levels until 2024, one year later than the previous estimate.
Lam explains that because of the rise of a second COVID-19 wave in Hong Kong and elsewhere, the airline has adjusted the passenger flights capacity for August to 8% of the normal capacity. He expects that Cathay will operate a similar level of passenger flight capacity in September.
Since August 15, Cathay has resumed the transit services via Hong Kong International Airport for passengers from the Chinese mainland. This resumption will help enhance the passenger volume via the Hong Kong hub, and offer connections from the Chinese mainland to different parts of the world.
But the COVID-19 pandemic is not the only issue. The company has also to deal with a looming global recession and geopolitical tensions, which will make it difficult to return to normal demand conditions any time soon.
