Cathay Pacific releases traffic figures for December 2020 and estimated impact of latest quarantine measures

Cathay Pacific carried a total of 39,989 passengers last month, a decrease of 98.7% compared to December 2019. The month’s revenue passenger kilometres (RPKs) fell 98.1% year-on-year. Passenger load factor dropped by 66.6 percentage points to 18.4%, while capacity, measured in available seat kilometres (ASKs), decreased by 91.2%. For 2020 as a whole, the number of passengers carried by Cathay Pacific and Cathay Dragon dropped by 86.9% against a 78.8% decrease in capacity and an 85.1% decrease in RPKs, as compared to 2019.

Cathay Pacific carried 120,218 tonnes of cargo and mail last month, a decrease of 32.3% compared to December 2019. The month’s revenue freight tonne kilometres (RFTKs) fell 23.7% year-on-year. The cargo and mail load factor increased by 13.9 percentage points to 80.3%, while capacity, measured in available freight tonne kilometres (AFTKs), was down by 36.9%. For 2020 as a whole, the tonnage carried by Cathay Pacific and Cathay Dragon fell by 34.1% against a 35.5% drop in capacity and a 26.5% decrease in RFTKs, as compared to 2019.

Passenger

Cathay Pacific Group Chief Customer and Commercial Officer Ronald Lam said: “Our passenger business continues to face significant challenges. We increased capacity by about 8% in December compared to November as we gradually added capacity on flights serving North America, the South Pacific and some regional routes. Overall, average daily passenger numbers and load factor in December both remained low at 1,290 and 18.4%, respectively.

“In the first half of December, we saw some good demand for student travel from the UK to Hong Kong for the festive holiday period. However, our passenger business was notably impacted in the second half of the month when the Hong Kong SAR Government implemented a ban on flights from the UK to Hong Kong on 22 December amid the surge of COVID-19 cases in the UK, together with the change from 14 days’ to 21 days’ mandatory quarantine in designated hotels for arrivals into Hong Kong. On 28 December we carried just 490 passengers in total – the lowest number in a single day since 15 June. While some flights from Hong Kong to the UK have resumed as of January, flights from the UK to Hong Kong remain suspended.

Cargo

“Cargo had a relatively good finish to 2020, in line with the overall positive performance seen in the second half of the year. December tonnage was up month-on-month by about 3%, with exports from the Chinese mainland and Hong Kong holding up for longer than is normally expected at the end of the year. The overall buoyancy of the market ensured that load factors continued to grow, averaging 80.3% in December – the highest monthly average in 2020. The imbalance in the market between demand and available capacity created an ongoing need for cargo-only passenger flights prior to Christmas, and overall in December we operated 713 pairs of these flights – only slightly fewer than in our peak month of November.

“Network traffic feed from Northeast Asia and the Southwest Pacific was also encouraging with good movements of priority cargo and special products. We launched a seasonal cargo service into Hobart, Australia last month transporting high-quality fresh produce from Tasmania’s capital city to various parts of Asia. We also launched a new scheduled freighter service between Hong Kong and Riyadh in January to meet the strong demand for shipments of e-commerce and other general cargo such as garments.

“We have also made all necessary preparations to ensure we are able to contribute to the vital mission of transporting COVID-19 vaccine shipments around the world with the development of our dedicated vaccine solution: cargoclan.cathaypacificcargo.com/vaccine-solution. This solution builds on our many years of experience in transporting pharmaceutical shipments, and we stand ready to assist with our extensive freighter network.

Outlook

“Effective later within February 2021, the Hong Kong SAR Government will implement a new 14-day hotel quarantine plus 7-day medical surveillance requirement for both our Hong Kong-based pilots and cabin crew. The new measure will have a significant impact on our ability to service our passenger and cargo markets. The actual extent of such impact is yet to be confirmed and will be affected by a number of factors, including the success of mitigation measures we are able to adopt, such as agile manpower resources management. At this stage, our preliminary assessment is that the new measure may result in a reduction of current passenger capacity of around 60%, a reduction of current cargo capacity of around 25% and a further increase in our cash burn of approximately HK$300-$400 million per month, on top of our current HK$1.0-1.5 billion levels.”