The coronavirus scare has prompted the Cathay Pacific Group to cut overall passenger flight capacity in February and March by 40 percent and the airline expects April will also be down.
The hit comes as the airline appeared to be recovering slightly from the political tensions that had rocked its home base with passenger performance in January initially only slightly behind 2019.
Inbound passenger traffic to Hong Kong in January was still down 40 percent but this was an improvement on the 46 percent declines in November and December.
Outbound traffic was up 1 percent, largely due to the Chinese New Year, and lower-yield transit traffic was 7 percent higher than the same time last year.
Overall January passenger numbers for Cathay Pacific and Cathay Dragon were down 3.8 percent compared to January 2019 while the load factor fell 1.3 percentage points to 84.7 percent.
“We started off 2020 fairly positively, seeing satisfactory passenger traffic volume through the first three weeks of the year,’’ Cathay Pacific Group chief customer and commercial officer Ronald lam said.
“This was particularly evident with our long-haul routes, which showed improved load factors and yield over 2019.
“However, our performance deteriorated rapidly in the last week of January as the novel coronavirus situation became more severe, and it continues to weaken significantly. We saw significant cancellation of bookings within a short period of time.”
Freight, which is particularly important to Cathay, was down by 8.9 percent in January compared to the previous year.
The group saw solid demand for the first three weeks of January but plummeted as manufacturing came to halt in mainland China during the Chinese New Year holiday.
The delay in resuming Chinese manufacturing significantly affected both the Hong Kong and mainland China markets but demand remained buoyant across the rest of the network.
Not surprisingly, Cathay is predicting a significant hit to its first-half results.
“The first half of 2020 was already expected to be extremely challenging financially,’’ Lam said.
“As a result of this additional significant drop in demand for flights and consequential capacity reduction caused by the novel coronavirus outbreak, the financial results for the first half of 2020 will be significantly down on the same period last year.”
He added: “We have an incredible brand with a reputation and track record of premium service and commitment to our customers that differentiates us from our competitors.
“These qualities and values remain at the heart of everything we do and are what will help us come back stronger when we emerge from this current crisis.”
Cathay has temporarily shut three of its Hong Kong lounges becasue of the downturn.