Cathay Pacific said that its cargo business was the highlight of its May performance despite a double-digit drop in cargo volume year-on-year.

The Hong Kong-flag carrier said Cathay Pacific and Cathay Dragon carried 

carried 98,710 tonnes of cargo and mail last month, a decrease of 41.3% compared to May 2019.

The month’s revenue freight tonne-kilometres (RFTKs) fell 29.1% year-on-year as the cargo and mail load factor increased by 9.1 percentage points to 73%, while capacity, measured in available freight tonne kilometres (AFTKs), was down by 37.9%.

In the first five months of 2020, the tonnage fell by 29.7% against a 27.9% drop in capacity and a 22.3% decrease in RFTKs, as compared to the same period for 2019.

Given the already significant drop in passengers carried and RPKs over the first five months of this year, the Cathay Pacific Group said it continues to anticipate a substantial loss in the first half of 2020.

Earlier this week, Cathay Pacific announced a HK$39 billion recapitalisation plan designed to provide the company with the necessary funds to survive the current downturn and to be able to maintain Hong Kong as an international aviation hub amid unprecedented challenges to the global travel market

Phenomenal impact of COVID-19

Cathay Pacific said the cargo business continued to be the highlight in May as more cargo-only passenger flights were operated.

“Cargo performance remained strong and we carried approximately 17% more tonnage in May compared to April, though this still represented a significant year-on-year drop from the same month in 2019. Driven by strong demand for urgent shipments against a backdrop of reduced market capacity, load factor further improved to 73%, while cargo yields increased significantly," said Ronald Lam, Cathay Pacific Group chief customer and commercial officer. 

Lam noted that to ensure time-sensitive cargo, such as medical supplies, was shipped to where it was needed most, the airline moved to maximise available cargo-carrying capacity, and chartered more flights from our all-cargo subsidiary, Air Hong Kong, to serve regional demand.

“We mounted close to 900 pairs of cargo-only passenger flights in May, primarily serving long-haul destinations in North America, Europe and Australia. We have also been optimising much-need airfreight capacity by loading select cargo in the passenger cabins of our Boeing 777-300ER aircraft where possible," he added.

Meanwhile, Cathay Pacific said demand for medical supplies soften, while traditional industrial and consumer products began to show signs of picking up.

Exports from Southeast Asia and the Indian sub-continent also improved as local lockdown measures eased.

“We continue to adjust our capacity in accordance with demand. Moving forward, we expect our freighters will operate at near full capacity, while our cargo-only passenger flights may be reduced,” Lam added.

Outlook

With the “incredibly dynamic” situation currently facing the aviation industry — one that looks certain to significantly change the landscape of global aviation — the airline noted that it will be re-evaluating all aspects of its business model in the coming months “with a recommendation on the optimum size and shape of the Group moving forward.”

Lam said although Cathay Pacific us facing the “most challenging operating environment,” it remains resolutely committed to its customers and continues to have  “absolute confidence” in its ability to overcome these short-term challenges.

“The impact the global COVID-19 pandemic is having on the Cathay Pacific Group, and the wider aviation industry as a whole is phenomenal. Though there have been some small positive signs, such as the ban on transit traffic through Hong Kong International Airport (HKIA) beginning to ease, the future remains very uncertain,” Lam said.

“Unlike many of our global airline peers, we have no domestic network and so are entirely dependent upon cross-border travel,” he added.