Hong Kong-based carrier, Cathay Pacific has released its traffic figures for December 2020 and they are certainly a cause for concern when compared with 2019 figures. According to Cathay Pacific, the airline carried 98.7% fewer passengers in December 2020 in comparison to the same month for 2019. The average passenger load factor for December 2020 onboard Cathay Pacific and Cathay Dragon flights fell sharply to just 18.4%. Taking 2020 as a whole, Cathay Pacific and its sister airline, Cathay Dragon, carried approximately 86.9% fewer passengers than it did in 2019.
Like many airlines around the world, Cathay Pacific has struggled due to the unprecedented reduced demand and strict travel restrictions implemented by the Hong Kong Government in an effort to stop the spread of COVID-19. Over the past year, the Hong Kong flag carrier has been heavily reliant on its cargo operations, and this has certainly provided a positive revenue stream for the airline. So let’s take a closer look to see how well Cathay Pacific’s two main business areas performed for the month of December last year.
Passenger Operations:
According to the Group’s Chief Customer and Commercial Officer, Ronald Lam, the airline’s passenger business “continues to face significant challenges.” Cathay Pacific still managed to grow capacity on passenger flights for December by 8% in December in comparison to November this was mainly added on routes to North America and the South Pacific region including some regional destinations. Despite growing capacity, the airline’s capacity for 2020, which is measured in Available Seat Kilometres (ASKs), had decreased by a total of 91.2% when compared with 2019 levels. In regards to December specifically, daily passenger numbers and load factors continued to be very low. Over the course of December, the airline carried were roughly 1,290 passengers per day with an average load factor of 18.4% respectively.
Cathay Pacific said that the second half of December saw a significant decrease in passengers numbers flying from the UK to Hong Kong. This was mainly due to a travel ban imposed by the Hong Kong Government on flights from the UK. The ban was imposed on the 22nd of December amid the exponential increase of COVID-19 cases in the UK. Moreover, the government changed the mandatory quarantine period for those arriving in Hong Kong from 14 to 21 days. Cathay Pacific acknowledged that some flights bound for the UK have resumed this month, but commercial flights from the UK to Hong Kong remain suspended.
Cargo Operations:
The Chief Customer and Commercial Officer of the Cathay Pacific Group acknowledged that cargo had “a relatively good finish to 2020.” He added that this is in line with “the overall positive performance seen in the second half of the year.” Cargo carried for December was up 3% in comparison to the previous month, with a higher average load factor of 80.3% for December – the highest monthly average for 2020. During December Cathay Pacific operated 713 pairs of cargo-only passengers flights, slightly fewer than its November figure of 728 flights, which was also the carrier’s peak month.
The carrier has also launched two new cargo-routes, one to Hobart, in Australia, which will transport high-quality fresh products from Tasmania’s capital city to various parts of Asia. Cathay Pacific Cargo also added a series of chartered freighter services between Hong-Kong and Ryadh, in Saudi Arabia. The Hong Kong-based carrier said that this was mainly due to the strong demand for e-commerce shipments and general cargo.
Cathay Pacific said it remains committed to delivering the COVID-19 vaccines around the world, however, it added that new travel measures being implemented by the Government of Hong Kong “will have a significant impact on [its] ability to service [its] passenger and cargo markets.” According to a preliminary assessment of the new measures, the airline expects it may have to drop current passenger capacity by approximately 60% and reduce its cargo capacity by around 25% for February 2021 resulting in its cash burn increasing to approximately between HK$300-$400 million (roughly US$39-$50 million) per month.
