Cathay Pacific Group saw its cargo volumes further slump in August driven by the continued unrest in Hong Kong.

Cathay Pacific and Cathay Dragon carried 161,394 tonnes of cargo and mail last month, recording a decline of 14% compared to the same month last year. This is also lower than the  169,720 tonnes that the airline carried in July.

Across the board slump in August

The carrier said cargo and mail load factor fell by 7.5 percentage points to 60.9%. Capacity, measured in available freight tonne kilometers (AFTKs), was also down by 0.6% while cargo and mail revenue freight tonne-kilometers (RFTKs) dropped by 11.6%.

In the first eight months of 2019, the tonnage fell by 7.1% against a 0.8% increase in capacity and a 7.2% decrease in RFTKs, as compared to the same period for 2018.

“On the cargo side, our business continued to face headwinds. Tonnage further deteriorated month-on-month across all regions, driven in particular by slow demand over the holiday season in different parts of the world, the effects of tropical storms and disruptions at Hong Kong International Airport," said Cathay Pacific chief customer and commercial officer Ronald Lam.

Holiday season to lift Sept. cargo outlook

"Ongoing geopolitical tensions continued to affect overall market sentiment. Nevertheless, our outlook for September is slightly more positive and we expect to see demand progressively improve, driven by project shipments and the restocking of inventory as we enter the traditionally high-demand season," he added.

The group carried a total of 2.9 million passengers in August –  a drop of 11.3% compared to August 2018. This is also significantly lower than the 3.3 million passengers in July.  Load factor, further declined by 7.2 percentage points to 79.9%, from dropping 0.6 percentage points to 86.1% the month prior, while capacity, measured in available seat kilometers (ASKs), rose by 5.1%.

In the first eight months of 2019, the number of passengers carried grew by 2.2% and capacity increased by 6.5%, as compared to the same period for 2018, describing August as "an incredibly challenging month, both for Cathay Pacific and for Hong Kong," according to Lam.

2019 outlook revised downward

Overall tourist arrivals into the city were nearly half of what they usually are in what is normally a strong summer holiday month, which has significantly affected the performance of our airlines. Cathay Pacific said its inbound traffic was down 38% while outbound was down 12% year-on-year.

Cathay said given the "current significant decline in forward bookings" for the remainder of the year, the Hong Kong flag carrier will make some short-term capacity realignments.

"Specifically, we are reducing our capacity growth such that it will be slightly down year-on-year for the 2019 winter season (from end October 2019 to end March 2020) versus our original growth plan of more than 6% for the period.," Lam further said.

The airline, however, remains optimistic in the medium term.