The Cathay Pacific Group expects the operating environment in 2020 to remain “highly challenging” as it moves to tackle the offset unfavorable conditions by reducing capacity and offering staff voluntary unpaid leave.
Combined traffic figures Thursday which showed passenger numbers on Cathay Pacific and Cathay Dragon fell 3.6 percent in December compared to the previous December.
Inbound passenger traffic saw a 46 percent decline for the second consecutive month as the city continued to be plagued by political unrest.
READ: Competitors attack tax holiday for troubled Flybe.
Cargo fared a little better with overall volume in December on a par with November and 2.9 percent down compared to the same month in 2018.
And on the plus side, a 15 percent growth in transit traffic and a 1.3 percent reduction in capacity helped boost the December load factor to 85 percent.
“The sentiment for travel into Hong Kong was particularly weak on our regional routes such as mainland China, Taiwan and Japan,” said Cathay Pacific Group chief customer and commercial officer Ronald Lam.
“On the brighter side, our long-haul routes performed well with better load factors. Outbound traffic, meanwhile, was down 4 percent– a further improvement over the previous few months, but still significantly below what we would expect for a peak holiday month.”
Group passenger traffic for 2019 fell by 0.7 percent to 35.23 million and Cathay is expecting its second-half performance to be significantly below that of the first half.
“2019 was an incredibly challenging year for both the Cathay Pacific Group and Hong Kong,’’ Lam said.
“Our full-year load factor remained above 82 percent despite being 1.8 percentage points lower compared with 2018.
“Intense competition, particularly during the non-peak period, along with our greater reliance on transit traffic have continued to place significant pressure on yield. “
Lam said bookings for Chinese New Year appeared promising with the boost in transit passengers but the airline continued to see a significant shortfall for the period after the holiday, especially from inbound traffic.
“We anticipate 2020 will continue to present us with a highly challenging operating environment,’’ he said.
“We remain agile in our operations, ensuring our capacity is best aligned with demand.
“As announced last month, we are reluctantly reducing our overall seat capacity in 2020 by 1.4 percent year-on-year as opposed to our original plan of 3.1 percent growth in light of the immediate commercial challenges we are facing. “
Nonetheless, the Cathay executive said the group’s commitment to its passengers remained resolute.
“In 2020, we look forward to taking delivery of the first of our modern Airbus A321neo single-aisle aircraft and continuing to prepare for our upcoming Boeing 777-9 aircraft,’’ he said.
“Customers can look forward to a further enhanced experience on the ground and in the air, as new aircraft are a great platform to showcase the best of what we offer.
“We will also continue to invest in our digital transformation to enable customers to enjoy a seamless and personalized journey, giving them more reasons to choose to fly with us.”
