Cathay Pacific released its traffic figures for April which continued to reflect the impact of travel restrictions and quarantine requirements as the Hong Kong government implements recent adjustments to these pandemic-related measures in phases.
Cathay Pacific carried 92,361 tonnes of cargo last month, an increase of 26.3% compared to April 2021, but a 43.6% decrease compared with the same period in 2019.
Hong Kong-based Cathay said the month's cargo revenue tonne-kilometers (RFTKs) decreased 13.2% year-on-year and were down 62.4% compared to April 2019.
The cargo load factor also decreased by 2.7 percentage points to 80.2%, while capacity, measured in available cargo tonne kilometres (AFTKs), was down by 10.2% year-on-year, and was down by 70.7% versus April 2019.
Cargo down year-on-year in first four months
Cathay said in the first four months of 2022, the tonnage decreased by 5.4% against a 42% decrease in capacity and a 43.3% decrease in RFTKs, as compared to the same period for 2021.
"Regarding cargo, our flight capacity continued to recover in April as we maximised regional frequencies and resumed freighter services to Frankfurt – the first freighter flights we have operated to Europe since the end of December last year. Nevertheless, our cargo flight capacity remained about 29% of our pre-pandemic capacity," said Ronald Lam, chief customer, and commercial officer at Cathay.
He added that demand was "mixed," with cargo exports from Shanghai affected by the city’s lockdown, which has disrupted supply chains in the eastern part of the Chinese Mainland.
"On the other hand, demand from Hong Kong began to recover as cross-border bottlenecks began to ease, driven primarily by sea feeders that helped offset the impact from cross-border trucking services remaining constrained," Lam continued.
"Elsewhere in our network, demand remained healthy with machine parts and industrial products from Northeast Asia and the Americas particularly active. Across many of our markets, we saw a strong end of the month coinciding with the pre-holiday rush ahead of Labour Day and Golden Week in Japan," the Cathay executive further said.
Recovery of passenger demand to boost capacity
Meanwhile, Cathay said April saw some positive developments for its travel business with improved demand across its network following the lifting of the ban on inbound flights from nine countries on April 1 in addition to the adjustment of the quarantine period from 14 to seven days for travelers arriving in Hong Kong.
The airline carried a total of 40,823 passengers last month, an increase of 82.2% compared to April 2021, but still, a 98.7% decrease compared to the pre-pandemic level in April 2019.
"We saw increased demand among residents wishing to return home to the city, in particular from the UK. In view of this stronger demand, we increased our passenger flight capacity by about 25% compared with March, although we still only operated about 2% of our pre-pandemic passenger flight capacity last month," Lam said, adding that Cathay increased additional frequencies to and from other destinations in Asia, while it reduced frequencies into the Chinese Mainland in view of the COVID-19 situation in Shanghai.
Moving forward, Cathay is looking to restart more long-haul freighter services in the coming months as capacity is expected to get a boost from the recovery of its passenger network.
"On top of the additional cargo flight capacity provided by our increased passenger flights, from June we intend to add back long-haul freighter destinations in Europe and the Americas and resume freighter services for the UAE, Saudi Arabia, and Cambodia," Lam said, although noting that the ongoing anti-pandemic measures in Shanghai and other parts of the Chinese Mainland continue to affect overall market demand.
"We will continue to look for opportunities to add back capacity and rebuild our hub and network. Encouragingly, we expect this additional capacity to have a positive impact on Cathay Pacific's business and we have been evaluating the potential benefit to our operations and cost base," the Cathay executive said.
Cash burn target to decrease
He noted that according to preliminary assessment, Cathay is targeting to reduce operating cash burn to less than HK$500 million (US$63.70 million) per month for the next few months down from its previous forecast of HK$1 billion to HK$1.5 billion per month.
Meanwhile, during the company's annual general meeting, Cathay Pacific Airways Ltd. chairman Patrick Healy warned that Hong Kong is "falling behind" as the rest of the world starts to bounce back from the pandemic.
"As aviation hubs across the world begin to bring back capacity and stage a recovery, Hong Kong is obviously falling behind to a certain extent," Healy said.
As mentioned in its financial results, Cathay continues to operate only 2% of its passenger capacity through April.
Hong Kong has started to ease travel restrictions, flight bans, and quarantine measures starting in April after being largely closed to the rest of the world since the Covid-19 pandemic began.