Cathay Pacific eyes cargo to boost results, restrictions hurt passenger traffic
Cathay Pacific’s passenger numbers were just 3% of pre-pandemic levels in October 2021, the Hong Kong-based carrier revealed.
Cathay Pacific said in a traffic update on November 17, 2021 that while its financial results for the second half of 2021 are set to be better than the first half, it is still expecting “substantial” losses.
The carrier has been hard hit by tough COVID-19 restrictions in Hong Kong. While airlines in other parts of the world have been enjoying a recovery thanks to many countries lifting their travel restrictions, Cathay remains largely grounded, except for cargo operations.
Cathay Pacific carried 76,430 passengers in October 2021, down 97% on October 2019. Its passenger capacity was 90% lower than October 2019.
Cargo volumes were up almost 20% on October 2020, but still down 25% compared to pre-pandemic levels. Cargo volumes remain restricted globally because lower passenger plane traffic means less capacity available in the bellies of those planes. The resulting supply-demand gap has pushed prices higher and boosted financial results for many airlines.
Chief customer and commercial officer Ronald Lam said strong cargo activities and a tight focus on costs have had a positive impact on Cathay’s operating cash burn.
“This is to the extent that we have been able to achieve close to operating cash breakeven for the four-month period from July to October 2021,” he commented.
Another bright spot is the opening of Australian borders, with Cathay seeing increased bookings and adding more flight capacity as a result.
“Subject to travel restrictions and other operational constraints due to COVID-19, we expect that our second-half 2021 results will be a considerable improvement on our first-half 2021 results, although our overall losses for the full year 2021 will still be substantial.
However, the situation remains very uncertain, overall, Lam said.
Some 130 Cathay pilots were forced to quarantine this week after three cargo pilots tested positive for COVID-19 after a layover in Frankfurt, Germany.
“Travel and operational restrictions continue to greatly impact our ability to mount flights and we are still facing many challenges to both our passenger and our cargo business as the COVID-19 situation in different parts of the world continues to evolve.”
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