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Cathay Pacific says no clear sign of recovery; to cut capacity by 96% in April and May
March 20th 2020
The Cathay Pacific Group announced earlier today it would reduce capacity across the networks of Cathay Pacific Airways and Cathay Dragon by 96% in April and May. Read More »
The announcement follows a HK Express statement earlier today that it would suspend flights across its entire network from March 23 to April 30. See separate story.
“Our ability to maintain even this skeleton schedule will depend on whether more travel restrictions are imposed by governments around the world which will further dampen passenger demand,” a company statement said.
Cathay Pacific will operate three flights a week to 12 destinations: Bangkok, Ho Chi Minh City, Jakarta, London Heathrow, Los Angeles, Manila, New Delhi, Taipei, Tokyo Narita, Singapore, Sydney and Vancouver.
Cathay Dragon will have three flights a week to three cities: Beijing, Shanghai and Kuala Lumpur.
“While our freighter network remains intact, we also are ramping up our cargo capacity by mounting charter services and operating certain suspended passenger services purely for air freight to meet cargo customer demand," Cathay Pacific Airways chief customer and commercial officer, Ronald Lam, said today.
Cathay Pacific foreshadowed worsening market conditions in the period ahead after announcing an unaudited loss of HK$2 billion (US$ 257.1 million) in February from the ongoing coronavirus pandemic hits.
The loss, disclosed in the airline group's latest monthly traffic figures announced this week, comes a week after the company warned to expect a "substantial loss" in the first half of calendar 2020.
“The scale of the challenge we are currently facing is unprecedented and no one can predict when conditions will improve," Cathay Pacific Group chief customer and commercial officer, Ronald Lam, said in a statement on March 16.
"Our advance passenger bookings show no clear signs of recovery at this stage, and the gap in bookings compared to 2019 continues to widen." Cathay Pacific cut capacity by about 65% in March.
The airline group - comprising Cathay Pacific, regional wing Cathay Dragon and recently acquired low-cost carrier (LCC) HK Express – said it planned to "only operate a bare skeleton passenger flight schedule for April".
“The situation has further deteriorated since February," Lam said.
Revenue passenger kilometres (RPK) fell 54.1% in February, compared with the prior corresponding period. The decline was most pronounced on mainland China routes, where RPKs tumbled 87.3%.
Load factors across the network dropped by 28.6 percentage points to 53.1%. In addition to the Mainland, Cathay said the most significant drops in passenger volumes were on Taiwan, South Korea and Philippines services.
"On a typical day following the Chinese New Year peak we would normally carry around 90,000 passengers. Towards the end of February, that figure dropped to below 20,000," Lam said.
The Hong Kong government this week announced that from Thursday all travellers to Hong Kong – except those from China (with restrictions), Macau and Taiwan – would have to be home quarantined for 14 days. Following the period of self-isolation, there would be two more weeks of medical monitoring.
The announcement, made on Tuesday, led to scores of Hong Kong residents studying overseas trying to return home, sparking fears of a renewed outbreak of coronavirus cases in the Special Administrative Region.
Cathay operated a number of additional flights from the United States and Europe to Hong Kong to help students return.
