Cathay Pacific is forecasting its cargo business to moderate from its exceptional performance during the pandemic years, but the Hong Kong-based airline signalled a positive air freight outlook for the second half of the year.

Patrick Healy, chairman of Cathay, said in a statement during the release of the company's 2023 Interim Results for the first half that the air cargo segment will continue to ease from pandemic highs.

"In terms of our cargo business, we expect it will continue to moderate compared with the exceptional levels of the past three years," Healy said on his prospects for the air cargo business of Cathay Pacific.

"Nevertheless, we anticipate a continued solid performance throughout the second half of 2023 with some tonnage improvements towards the end of the third quarter as we enter the traditional peak period," he added.

In the first half of 2023, Cathay saw cargo revenue decrease by 11.6% to HK$10,741 million compared with the same period in 2022.

Healy said this reflects a "weaker global market for air cargo."

Meanwhile, capacity — measured in available cargo tonne kilometres (AFTKs) — increased by 117.6% and traffic, measured in cargo revenue tonne kilometres (RFTKs), increased by 83.0%.

For the period, total tonnage increased by 23.8% to 651 thousand tonnes compared to the same six-month period in 2022.

Cathay reported that the load factor was 63.8% compared with 75.8% in the first half of 2022.

On track to full-recovery

Overall, Healy said the Hong Kong flag carrier is "on the right track" to full recovery — evidenced by the growth trajectory in most of its business segments.

"The first half of 2023 has been a positive period for the Cathay Group, as we worked to rebuild connectivity at the Hong Kong international aviation hub following the full reopening of borders in Hong Kong and in the Chinese Mainland," he said, adding that as Hong Kong's home carrier, Cathay's focus has been on adding more flights and more destinations to cater to the growing demand.

Healy said as of the first half, the airline reached 50% of pre-pandemic Group passenger flight capacity levels covering 70 destinations in March.

He added that Cathay is also "on track" to achieve its target of 70% pre-pandemic passenger flight capacity levels covering 80 destinations by the end of 2023.

"... And we are confident of reaching 100% by the end of 2024."

Further demonstrating this recovery, Healy noted that the Group plans to buy back 50% of the preference shares before the end of 2023 at a redemption price of over HK$9.75 billion and the remainder by the end of July 2024 — subject to completion of the proposed capital reduction and its business conditions at the relevant time.

"While we are still only part way along our rebuilding journey, our results for the first six months of 2023 demonstrate that we are on the right track," the Cathay chairman added.