Cathay Pacific reported a decline in cargo volumes in the first half of the year reflecting weaker global trade amid the ongoing trade tensions between China and the US.
In its 2019 interim results, Cathay Pacific and subsidiary Cathay Dragon, reported a 5.7% drop in tonnage carried to 979 thousand tonnes for the January to June period. Cargo revenue was also down 11.4% year-on-year to HK$11.5 billion (US$1.47 million) as cargo yields also recorded a 2.6% downturn at HK$1.88 (US$0.24).
"Cargo revenue declined, reflecting weaker global trade brought about in part by US-China trade tensions.Volume and yield declined," Cathay Pacific Chairman John Slosar said in a statement.
Flown cargo capacity, however, increased by 1.1%, principally due to additional belly cargo space in newly acquired passenger aircraft.
"Facing weak demand, we rationalised freighter capacity and emphasised shipments of specialist cargo," Slosar added in his statement.
The Hong Kong flag carrier noted that there was good growth in Southeast Asia cargo shipments in the early part of 2019. The carrier also increased freighter services to Singapore since January 2019, and it expanded a joint business agreement with Lufthansa Cargo to start eastbound joint shipments from Europe to Hong Kong.
Under the agreement, Hong Kong will be directly connected to Frankfurt, Amsterdam, Barcelona, Brussels, Dublin, London (Gatwick and Heathrow), Madrid, Manchester, Milan, Munich, Paris, Rome and Zurich.
Overall, the Cathay Pacific group reported a HK$1.35 billion (US$172 million) profit in the first six months of 2019, compared to a loss of HK$263 million (US$30.1 million) seen last year.
The airline is looking at positive prospects for the rest of the year, although risks remain.
"Our airlines normally achieve better results in the second half of the year than in the first half and, despite headwinds and other uncertainty, we expect this to be the case in 2019," Slosar said.
"Geopolitical and trade tensions are expected to continue to affect the global economy and, in turn, demand for air travel and air freight," he added.
The ongoing protests in Hong Kong, for example, already reduced inbound passenger traffic in July and are adversely impacting forward bookings.
"Our positive performance continued in the first half of 2019, but the operating environment for our airlines worsened as geopolitical and trade tensions intensified," the Cathay Pacific chairman further said.