Cathay Pacific Cargo is expecting a muted peak season this year amid global economic uncertainty and cross-border trucking issues closer to home.
Updating on current market conditions, Cathay Pacific head of cargo sales for Hong Kong and the Greater Bay Area (GBA) Frank Yau said the airline remains "cautiously optimistic" as Hong Kong heads down to further recovery.
Yau said Cathay continued to add passenger flights allowing the airline to operate 65% of its pre-pandemic cargo capacity and demand out of Shanghai is picking up as the city continues to lift lockdown restrictions.
"Shanghai is now operating a normal volume of flights and we anticipate some of the growth lost in the first half of the year will move across into the second as the supply chain stabilises," Yau said.
"We are anticipating that this will contribute to a busy winter season this year, but it may not be as pronounced as last year, in part due to some economic uncertainty from higher energy prices and inflationary forces that are starting to dent consumer confidence," he added.
The company is also facing some cross-border trucking issues closer to home in Hong Kong.
"The situation is fluid but the drivers who take cargo between our home hub and the Chinese Mainland, and the wider Greater Bay Area (GBA) in particular, are still operating in a closed loop in both directions," Yau said, adding that agents are continuing to bring in some cargo from other cities in the GBA to our hub by sea.
"The GBA is and will continue to be, a hugely important market for us. That is why we have invested resources in and expanded our GBA Cargo Sales Team."
"With more than 86 million people, the GBA's population is 10 times that of Hong Kong alone and makes up 12-13% of the Chinese Mainland’s GDP," he added.
With the easing of restrictions in Hong Kong, Cathay Pacific also continues to restore its passenger capacity which is projected to reach up to a quarter of the airline's pre-pandemic level by the end of the year.
The airline noted that it will also continue to operate cargo-only passenger flights to support cargo operations its cargo operations. However, Cathay noted that it has faced some challenges when it comes to expanding cargo operations.
"Our reactivated full freighter schedule was subject to some operational issues in July, in combination with a number of different regulatory requirements with which we have to comply," Yau said.
"That put some pressure on our crew resources leading to limited cancellations as we have to roster dedicated crews to the Chinese Mainland, and this prevents us from redeploying crewing resources from elsewhere," he added.
"We will restore resources from August onwards and be ready for the seasonal upturn," the Cathay executive further said.