Cathay traffic remains down, airline commits to SAF goal

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Hong Kong flag carrier Cathay Pacific has, like airlines around the world, been hit hard by the COVID-19 pandemic. (PHOTO: Matt Driskill)

Cathay Pacific released its traffic figures for August 2021 that continued to reflect the airline’s substantial capacity reductions in response to significantly reduced demand as well as travel restrictions and quarantine requirements in place in Hong Kong and other markets amid the ongoing global COVID-19 pandemic.

Cathay Pacific carried a total of 135,353 passengers last month, an increase of 278.4 percent compared to August 2020, but a 95.3 percent decrease compared to the pre-pandemic level in August 2019. The month’s revenue passenger kilometres (RPKs) rose 294.1 percent year-on-year, but were down 92.4 percent versus August 2019. Passenger load factor increased by 26.5 percentage points to 46.4 percent, while capacity, measured in available seat kilometres (ASKs), increased by 68.9 percent, but remained 86.9 percent down on August 2019 levels. In the first eight months of 2021, the number of passengers carried dropped by 92.2 percent against a 76.2 percent decrease in capacity and an 89.7 percent decrease in RPKs, as compared to the same period for 2020. 

The airline carried 124,278 tonnes of cargo and mail last month, an increase of 21.7 percent compared to August 2020, but a 23 percent decrease compared with the same period in 2019. The month’s revenue freight tonne kilometres (RFTKs) rose 20.7 percent year-on-year, but were down 15.4 percent compared to August 2019. The cargo and mail load factor increased by 2.3 percentage points to 77.7 percent, while capacity, measured in available freight tonne kilometres (AFTKs), was up by 17.2 percent year-on-year, but was down 33.8 percent versus August 2019. In the first eight months of 2021, the tonnage decreased by 8.7 percent against a 21.8 percent drop in capacity and a 10.9 percent decrease in RFTKs, as compared to the same period for 2020. 

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

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 percent compared with July, although we still only operated about 13 percent of our August 2019 pre-pandemic levels. Load factor reached 46.4 percent – 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. We cautiously increased capacity on these services, with our Shanghai flights notably increasing to three times per day from mid-August, while our New York, San Francisco and Los Angeles flights also saw capacity increases. We also resumed flights to Chicago and Boston, which generated strong demand. Meanwhile, demand for student travel from Hong Kong and the Chinese Mainland to the UK also gradually picked up from mid-August. This included not only our London flights, but our Media Information newly resumed Manchester services. Other newly resumed services in August included 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.”

Cargo

(PHOTO: Cathay Pacific)

“While August is traditionally a quieter month for cargo due to the summer holiday period in the Northern Hemisphere, this was not the case this year and demand continued to be buoyant both from our home market, Hong Kong, and from across our network. Cargo capacity increased about 9 percent month-on-month, reaching approximately 66 percent of our August 2019 pre-pandemic levels,” Lam said. “Towards the end of the month our freighter schedule ramped up to peak season levels, with transpacific flights notably increasing to 39 flights per week. Two additional Boeing 777 ‘preighters’ have also now entered into service, bringing our total to six, providing us with additional capacity for carrying cargo. At the same time, our teams have been agile in responding to the constantly changing operating environment brought on by the COVID-19 outbreaks in various parts of our network. This has particularly impacted our services to Shanghai, where authorities have increased quarantine requirements for ground staff to contain the situation.”

Sustainable Fuel Commitment

(PHOTO: Cathay Pacific)

Cathay Pacific also announced that it plans to use Sustainable Aviation Fuel (SAF) for 10 percent of its total fuel consumption by 2030. Cathay Pacific has made efforts in supporting SAF development for more than a decade. In 2014, it was the first airline investor in Fulcrum BioEnergy, from which the airline has already committed to purchasing 1.1 million tonnes of SAF over 10 years, which will cover around 2 percent of its pre-COVID-19 fuel requirements on an annual basis. Cathay Pacific expects to begin taking delivery of SAF produced by Fulcrum and using it on a wider basis for its flights departing the US from 2024 onwards, when Fulcrum can scale up its production. 

Chief Executive Officer Augustus Tang said, “The use of Sustainable Aviation Fuel (SAF) is key to decarbonising our operations over the next few decades. Cathay Pacific already has a head start in this space with our investment and offtake agreement with Fulcrum BioEnergy. Our new commitment to have SAF comprise 10 percent of our total fuel consumption by 2030 is a clear signal of our determination to achieve our net-zero emissions target and to be a leader in the fight against climate change. The ability to achieve this target does not rest with airlines alone. We are calling on support from various stakeholder groups to help make it a reality, from policy makers, the energy sector, aircraft and engine manufacturers, and even our customers, who are keen to reduce their carbon footprint. Only by joining hands can we meet this ambitious goal together.” 

Cathay Pacific is undertaking a multi-pronged approach towards a green recovery and long-term transition towards net-zero carbon emissions. Apart from its increased usage of SAF, other key components of Cathay Pacific’s carbon reduction roadmap include fleet modernisation, operational efficiency improvements, aviation and carbon capture technology innovations, and carbon offsets through its Fly Greener programme – which has offset over 300,000 tonnes of carbon emissions since 2007. Additionally, Cathay Pacific has already pledged to cut its absolute ground emissions by 32 percent from the 2018 baseline by 2030, through enhancing energy-saving measures and exploring renewable energy options in its premises and ground operations.

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