Cathay falls short of capacity targets

HONG KONG, 23 September 2021: Cathay Pacific’s traffic figures for August 2021 reflect substantial capacity reductions in the face of reduced demand caused by travel restrictions and quarantine requirements in Hong Kong and other markets.

Cathay Pacific carried 135,353 passengers last month, an increase of 278.4% compared to August 2020, but a 95.3% decrease compared to the pre-pandemic level in August 2019.

The month’s revenue passenger kilometres (RPKs) rose 294.1% year-on-year but were down 92.4% versus August 2019.

Passenger load factor increased by 26.5 percentage points to 46.4%. Capacity, measured in available seat kilometres (ASKs), increased by 68.9% but remained 86.9% down on August 2019 levels. In the first eight months of 2021, passengers dropped by 92.2% against a 76.2% decrease in capacity and an 89.7% decrease in RPKs, as compared to the same period for 2020.

Commenting on the results, chief customer and commercial officer Ronald Lam said: “While the Covid-19 situation continues to present us with considerable challenges, we did see some improvement in the performance of our passenger business in August. Overall, passenger capacity increased 81% compared with July, although we still only operated about 13% of our August 2019 pre-pandemic levels. Load factor reached 46.4% – the highest it’s been since March 2020.”

August’s passenger performance was driven primarily by student traffic, in particular from the Chinese Mainland to the US. The airline increased capacity on these services, with its Shanghai flights notably increasing to three times per day from mid-August. Services to New York, San Francisco and Los Angeles flights also saw capacity increases. The airline also resumed flights to Chicago and Boston.

Student travel from Hong Kong and the Chinese Mainland to London, UK, also gradually picked up from mid-August. The airline resumed its Manchester services. It also resumed services in August to  Paris, Phuket and Qingdao.

“From early August, we were able to resume flights from the UK to Hong Kong, although the inbound demand was relatively weak. In general, inbound traffic slowed down after 20 August when the Hong Kong SAR Government tightened quarantine requirements for travellers arriving in Hong Kong from 16 overseas places,” Lam explained.

Outlook

Even though the August passenger capacity, at about 13% of pre-pandemic levels, was an improvement over previous months, the airline had targeted 30% of pre-pandemic capacity by the fourth quarter of 2021.

That is now unlikely as operational and passenger travel restrictions remain in place and continue to constrain the airline’s ability to operate more flights.

Lam said the airline expects to maintain similar passenger capacity levels to August 2021 for the remainder of the year, “while remaining responsive to any unexpected changes in travel restrictions. We maintain our focus on prudent cash management, targeting cash burn of less than HKD1 billion per month for the rest of 2021.”

(Source: Cathay Pacific)

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