Cathay Pacific freighters make comeback, but cargo volume still lags

With a full freighter schedule in place this month for the first time since the start of COVID-19 and the reintroduction of more passenger service as Hong Kong gradually reduces travel restrictions, Cathay Pacific will be at 65% of its pre-pandemic cargo capacity by the end of the year, the airline’s chief customer and commercial officer predicted.

That’s good news for companies shipping by air in a region where transport supply is continuing to improve with the reopening of China but can still be challenging to find at a reasonable price.

The extra long-haul flights should help make up for a disappointing first half of the year for Cathay Pacific’s cargo business, as cargo tonnage dropped 4.3% to 1.2 billion pounds against a 31% decrease in capacity versus the same period last year. Cargo revenue ton kilometers, a driver of how much can be charged by distance traveled, plunged 35.7%.  

“We are anticipating that demand will pick up as we step out from the traditionally slower summer months and into the usual peak cargo season,” Ronald Lam said in a recent monthly update on the carrier’s performance.  

The Hong Kong-based airline carried 115,256 tons of cargo last month, a decrease of 4.4% compared to June 2021 and a 36.2% slide compared with 2019. The load factor, which measures how full aircraft are, fell 12 points to 68.4%. Capacity ticked up a half point but was still down 44% against the pre-pandemic level.

Tonnage increased 13% from May with cross-border feeder services able to operate more consistently as China lifted widespread municipal lockdowns, while imports from the Americas and Europe increased. Still, cargo volumes were lower in June than in 2021, largely due to reduced consumer demand from North America and Europe, and the lingering effects of the lockdowns, Cathay Pacific said. 

Cathay Pacific has been hobbled by restrictive COVID-19 rules on passengers and crews in its home country. In early January, it grounded all long-haul freighter flights in response to seven-day quarantine rules for returning pilots that depleted its available labor pool. Since the pandemic, Cathay has lost more than $3.5 billion and continues to be in the red.

Cathay operates 20 Boeing 747 cargo jets, including 14 late-model 747-8s.

Through ingenuity and perseverance, Cathay was able to maintain some of its regional freighter activity and gradually began to restore transcontinental flights in May. 

Now at full deployment, Cathay is operating between 90 to 100 freighters each week. For the Americas, that translates to about 35 transpacific freighters per week and there is daily freighter service to Europe. The airline also intends to operate more than 500 cargo-only passenger flights a month around the region, which will feed the reactivated long-haul freighter services, said Cargo Director Tom Owen in a recent customer newsletter.

Passenger activity is slowly picking up but was still only 5% of the 2019 level in June. Between the cargo fleet and the storage space in passenger aircraft, Cathay Pacific currently offers 56% of its pre-pandemic cargo capacity. 

Despite the lifting of crew quarantines and easing of passenger restrictions, Hong Kong travelers still face hurdles that are suppressing demand. Inbound travelers, for example, still need to spend several days in designated quarantine hotels. 

Cathay recently announced it will resume flights to Dubai three times per week beginning Oct. 2 with large Boeing 777-300s, selected in part because of their roomy cargo area. The flights will add cargo capacity beyond eight weekly freighter flights to the emirate. 

“Assuming current travel and operating restrictions as at the time of this report remain unchanged, we anticipate we will be able to operate up to about a quarter of our pre-pandemic passenger flight capacity levels by the end of the year,” Lam said.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

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