Cathay expects tough times to continue

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October 19, 2019
cathay
Cathay - not out of the rough weather yet. Credit Richard Kreider

Cathay Pacific is expecting tough operating conditions significantly affecting group passenger numbers to continue until at least the end of the year.

September traffic figures published Friday show year-on-year passenger numbers were again down as the group’s home base of Hong Kong continues to be rocked by political unrest.

Cathay Pacific and Cathay Dragon carried 2.43 million passengers, a drop of 7.1 percent compared to September 2018, while the passenger load factor fell 7.2 percentage points to 73.6 percent.

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At the same time, capacity in available seat kilometres rose 9.8 percent.

The challenging environment saw inbound passenger traffic drop 38 percent, the same as fall as in August, while outbound traffic was down 9 percent, a slight improvement over the 12 percent fall seen the previous month.

“The mainland China market has been hit especially hard and we observed very weak demand for travel over the National Day holiday – traditionally a very strong period,’’ said group chief customer and commercial officer Ronald Lam said.

“Our India routes were the main bright spot, buoyed by strong demand between India and North America.

“Intense competition together with an increasing reliance on transit passengers over the short term has continued to apply additional pressure on yield.

“We continue to see a significant shortfall in inbound bookings for the remainder of 2019 as compared to the same snapshot last year.

“This has been felt most strongly with bookings from mainland China and our other Asian markets.

“As previously announced, we are taking a number of short-term tactical measures to respond to this shortfall, most notably realigning capacity for the winter season (from end October 2019 to end March 2020).”

The cargo business saw some improvement compared to August with the two airlines carrying 172.637 tonnes of cargo and mail, down 4.4 percent compared to the previous year.

Lam said air freight had entered the traditional high-demand season and most markets saw a better month-on-month performance.

“However, the overall market remains challenging and competitive with tonnage carried and load factor for the year to date still significantly below the same period last year.

“We continue to closely monitor market sentiment and global travel trends in order to best align passenger and cargo capacity with demand.”