Cathay Pacific goes through the first quarter with 20% freighter capacity
Cathay Pacific carried fewer than 25,000 passengers in January, a 99.2% drop from three years ago, and cargo volume fell to 21% of pre-COVID levels, monthly figures show traffic figures released on Thursday that illustrate the devastating impact of Hong Kong’s restrictive response. to the omicron variant.
With its large freighter fleet and extensive long-haul passenger network, Cathay has always been one of the crown jewels of air cargo. It was the third-largest carrier by amount of cargo carried as recently as 2020. Now it’s a shell of itself.
Last month’s cargo volume of 81,837 tonnes was 51.5% lower than January 2019 and 31.8% lower than a year earlier. Revenue tonne-kilometres – a measure of freight carried in each sector multiplied by distance traveled – fell 64.4% year-over-year and 73.6% from 2019. Freight capacity fell 69% from December.
As part of the government’s broad efforts to eradicate COVID outbreaks, Hong Kong health authorities in early January increased the quarantine period from three to seven days for locally domiciled crew returning from international travel. The order reduced the number of available pilots, forcing Cathay Pacific to suspend a large number of long-haul freighter operations until March and causing substantial disruption for freight customers.
The airline was only able to operate limited cargo flights to the Americas, while shipping cargo to Europe, the Middle East and the Southwest Pacific was handled by cargo-only passenger planes . The company has 20 Boeing 747 cargo planes in its fleet.
Cathay was able to protect its regional freight services, allowing “more focus on opportunities in mainland China and the region.” This has resulted in an increase in cargo capacity for services to destinations in North East Asia and the Indian subcontinent where there was good demand ahead of the Lunar New Year holidays,” the Commercial Director said. Ronald Lam in a statement.
Cathay’s cargo numbers are expected to decline further in February due to reduced shipping levels in the first half of the month coupled with factory slowdowns due to China’s holiday season
Lam said cargo activity will be similar to January, although the airline was able to restore some cargo frequencies to the Southwest Pacific. Overall, cargo flight capacity is expected to remain below a third of pre-COVID-19 levels during the first quarter, a slight improvement from January.
The rules that hamper Cathay’s operations are penalizing the airline heavily at a time when cargo demand is booming and expected to remain strong throughout the year. In 2021, air cargo volume increased by 7% and cargo margins soared for most airlines due to supply shortages caused by reduced passenger flights. It’s also frustrating for shippers scrambling for transportation options in the face of shipping bottlenecks, the surge of Chinese manufacturing after the holiday season and continued inventory shortages.
COVID has complicated Cathay Cargo’s operations on many levels, including managing contactless aircrew transfers and sanitization patterns on aircraft and warehouses.
Cathay Pacific lost between $719 million and $783 million last year, a big improvement from 2020 when it was $2.8 billion in the red, according to preliminary results released last month. As with many airlines, strong cargo demand and high yields have helped cushion the blow from pandemic-induced reductions in passenger business.
The airline carried more than 1.4 million tonnes of cargo last year, about the same as in 2020 but a third less than in 2019. Last year it operated nearly 8,000 cargo-only passenger flights, many with its six Boeing 777s. aircraft reconfigured to accommodate cargo in the passenger cabin. Along with traditional commodities, it was carrying more than 120 million doses of COVID vaccines around the world.
Cathay Pacific officials said they expect to burn between $128 million and $192 million per month while quarantine-based capacity cuts remain in place.
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