Asia’s top flag carriers still getting hammered by COVID-19 quarantines and border closures

SIA and Cathay turn in disappointing numbers for November as quarantines remain in place despite the coming of a vaccine; Cathay expects second-half losses ‘significantly higher’ than first-half

Thousands of planes around the world have been grounded due to the COVID-19 pandemic. (PHOTO: Shutterstock)

Use this oneTwo of Asia’s best known flag carriers, Cathay Pacific and Singapore Airlines (SIA), continued to be hurt by border closures and quarantines due to the COVID-19 pandemic and both turned in disappointing traffic figures for November.

Cathay Pacific carried a total of 37,815 passengers in November, a decrease of 98.6 percent compared to November 2019. The month’s revenue passenger kilometres (RPKs) fell 97.9 percent year-on-year. Passenger load factor dropped by 61.5 percentage points to 18.5 percent, while capacity, measured in available seat kilometres (ASKs), decreased by 90.9 percent. In the first 11 months of 2020, the number of passengers carried by Cathay Pacific and Cathay Dragon dropped by 85.8 percent against a 77.7 percent decrease in capacity and an 83.8 percent decrease in RPKs, as compared to the same period for 2019.

Cathay Pacific carried 116,853 tonnes of cargo and mail last month, a decrease of 34.3 percent compared to November 2019. The month’s revenue freight tonne kilometres (RFTKs) fell 26.2 percent year-on-year. The cargo and mail load factor increased by 9.0 percentage points to 77.7 percent, while capacity, measured in available freight tonne kilometres (AFTKs), was down by 34.7 percent. In the first 11 months of 2020, the tonnage carried by Cathay Pacific and Cathay Dragon fell by 34.3 percent against a 35.3 percent drop in capacity and a 27.2 percent decrease in RFTKs, as compared to the same period for 2019.

Cathay Pacific Group Chief Customer and Commercial Officer Ronald Lam said: “We are still not seeing any meaningful improvement in our passenger business. On average, we carried just 1,261 passengers per day and load factor remained low at 18.5 percent – both marginal increases over October. While we saw reasonably good traffic coming back to Hong Kong from Canada and Australia, this was prior to the implementation of new government quarantine requirements in the middle of the month. Meanwhile, overall demand on long-haul routes, particularly the UK and continental Europe, remained weak owing to the ongoing impact of COVID-19 in many European countries.”

Cathay Pacific Group Chief Customer and Commercial Officer Ronald Lam. (PHOTO: Cathay Pacific)

Lam said certain regional markets like Indonesia, China and Japan was “promising”, but added that the cancellation of the planned Hong Kong-Singapore Air Travel Bubble (ATB) flights was “disappointing”. Lam also said “cargo demand further strengthened in November, largely driven by strong e-commerce traffic as well as solid movement of electronic products, perishables and automotive shipments across our network. We also continue to work on customised solutions for our business partners and notably we have commenced a series of chartered freighter flights serving Riyadh in Saudi Arabia. “Looking ahead on the passenger front,” Lam said, “we still are not seeing significant demand for travel as we head towards the end of 2020 – traditionally a strong travel season in the year. Demand continues to weaken on long-haul routes and we anticipate we will rely more on traffic on regional services in the immediate future. Given the slow speed of recovery, we expect to operate about 9 percent of pre-COVID-19 capacity in December and slightly above 10 percent in January 2021.”

Lam cautioned however that with the depleted capacity as well as additional restructuring and impairment costs announced in October, along with further aircraft impairment at year-end, “is expected to result in the second-half losses being significantly higher than the first-half losses reported in our interim accounts”.

Singapore Airlines

Airlines like Singapore Air have had to ground thousands of planes. (PHOTO: Steve Strike/Outback Photographics)

SIA said in its report that November group passenger capacity (measured in available seat kilometres) was down by 86.4 percent year-on-year. Overall passenger carriage (measured in revenue passenger-kilometres) was lower by 97.7 percent, resulting in a group passenger load factor (PLF) of 14.2 percent, a decline of 70.7 percentage points year-on-year. SIA’s capacity was 83.5 percent lower compared to last year, with the airline’s network connecting Singapore to 36 metro cities – up from 32 in October – with the addition of Brunei, Fukuoka, New York and Shenzhen. Passenger carriage declined 97.3 percent, resulting in a PLF of 13.9 percent. SilkAir’s passenger carriage decreased by 98.7 percent year-on-year against a 97.2 percent cut in capacity. PLF was 37.3 percent. SilkAir continued to operate flights to Cebu, Chongqing, Kuala Lumpur, Medan, Penang and Phnom Penh, and added Kathmandu to the list of destinations served. Scoot’s passenger carriage declined 99.1 percent year-on-year against a contraction in capacity of 94.1 percent, which led to a PLF of 13.9 percent. Scoot served 18 destinations in November 2020, with operations to West Asia and Europe remaining suspended.

In January and February, Changi Airport in Singapore was full of passengers. Now a lone student waits to say goodbye to a friend in a nearly deserted departure hall. (PHOTO: Matt Driskill)

Cargo load factor (CLF) was 22.4 percentage points higher year-on-year as the capacity contraction of 49.8 percent year-on-year outpaced the 32.0 percent decline in cargo traffic (measured in freight tonne-kilometres). Notably, cargo capacity and traffic were more than 20 percent higher than in October. All route regions continued to record year-on-year increases in CLF in November 2020.

“The SIA group’s airlines continue to closely monitor demand patterns in international air travel and will be swift and decisive in deploying capacity both in terms of destinations and frequencies,” SIA said in a statement. “SIA will reinstate flights to San Francisco and Nagoya from December 2020. There will also be some transfers of services between SIA or SilkAir and Scoot, and an increase in the frequency of some existing services in the passenger network. The SIA group looks forward to a gradual recovery in passenger operations as countries explore means to safely re-open borders with appropriate safeguards and testing protocols in place.”

A very quiet Changi Airport in Singapore. (PHOTO: Matt Driskill)

The airline also said it expects to play a large role in the regional distribution of COVID-19 vaccines due to the installed pharmaceutical handling capabilities at Singapore’s Changi Airport that positions Singapore well as a key transit hub for the transportation and distribution of vaccines, in particular from Europe and India to South East Asia, Australia and New Zealand. SIA will accord uplift priority to COVID-19 vaccine shipments across the key vaccine trade lanes. This means readying the airline’s seven Boeing 747-400 freighters, as well as the group’s passenger aircraft fleet which will be deployed on cargo operations to increase the capacity for vaccine transportation where needed, the airline said.

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