COVID-19: Cathay traffic down almost 100% in April 2020 as commercial flights remain grounded

Airline says COVID-19 is ‘biggest challenge” ever faced and group is ‘evaluating all aspects’ of business to ‘adapt to this new world in order to secure our future within it’

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(PHOTO: Matt Driskill)

Hong Kong flag carrier Cathay Pacific and its regional unit Cathay Dragon said combined passenger traffic for the month of April fell almost 100 percent in April compared to April 2019 as a result of the COVID-19 pandemic and the group’s 97 percent capacity reductions in response to significantly reduced demand as well as travel restrictions and quarantine requirements in place in Hong Kong and other markets.

Airlines like Cathay Pacific have had to ground hundreds of planes as they deal with the fallout from the COVID-19 virus, which has a major impact on world tourism as countries have closed their borders. (PHOTO: Shutterstock)

Cathay Pacific and Cathay Dragon carried a total of 13,729 passengers in April, a decrease of 99.6 percent compared to April 2019. The month’s revenue passenger kilometres (RPKs) fell 99.3 percent year-on-year. Passenger load factor plummeted by 62.3 percentage points to 21.7 percent, while capacity, measured in available seat kilometres (ASKs), decreased by 97.3 percent. In the first four months of 2020, the number of passengers carried dropped by 64.4 percent against a 49.9 percent decrease in capacity and a 59.1 percent decrease in RPKs, as compared to the same period for 2019.

The two airlines carried 84,634 tonnes of cargo and mail last month, a decrease of 48.3 percent compared to April 2019. The month’s revenue freight tonne kilometres (RFTKs) fell 37.3 percent year-on-year. The cargo and mail load factor increased by 7.6 percentage points to 70.1 percent, while capacity, measured in available freight tonne kilometres (AFTKs), was down by 44.1 percent. In the first four months of 2020, the tonnage fell by 26.6 percent against a 25.4 percent drop in capacity and a 20.6 percent decrease in RFTKs, as compared to the same period for 2019.

Cathay Pacific Group Chief Customer and Commercial Officer Ronald Lam said: “The COVID-19 pandemic continues to impact us in an unprecedented way. Year-to-date up to April, we made an unaudited loss of HK$4.5 billion (US$580.5 million) at the full-service airline level (Cathay Pacific and Cathay Dragon) and the financial outlook continues to be very bleak for the coming few months at least. We operated only a bare skeleton passenger flight schedule serving just 14 destinations in April. Passenger demand continued to fall during the month and we carried fewer than 500 passengers per day only. The ban on transit traffic through Hong Kong together with minimal demand for outbound travel meant that the majority of our very limited traffic came from inbound travellers, notably from North America and the UK.”

A screenshot of the Johns Hopkins University COVID-19 tracking site taken on 15 May. To access the live site, click on the image. (PHOTO: Matt Driskill)

Lam said the cargo sector for Cathay in terms of overall tonnage uplift in April dropped by almost a third compared to the previous month because of the impact of belly cargo, or the lack thereof, on passenger planes. The movement of certain cargo, such as perishables, seafood, live animals, industrial parts and equipment, was also negatively affected by lockdown measures around the world, the airline said.

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

“Significant effort was made to prioritise capacity for routings with the highest airfreight demand, most notably to the Americas, Australia and Europe. We also increased the utilisation of our existing freighter fleet, chartered more flights from our subsidiary Air Hong Kong, and successfully operated over 500 pairs of cargo-only passenger flights – more than double the number we operated in March. To further expand our available capacity, at the end of April we began loading cargo in the cabins of our Boeing 777 passenger aircraft, which we expect will serve long-haul markets especially well in the months to come,” Lam said.

The International Air Transport Association (IATA) released an updated analysis indicating that the COVID-19 crisis will see global airline passenger revenues drop by US$314 billion in 2020, a 55 percent decline compared to 2019. Airlines in Asia-Pacific will see the largest revenue drop of US$113 billion and a 50 percent fall in passenger demand year-on-year.

“Industry bodies and analysts are now predicting a much more prolonged recovery for the global aviation industry, with international travel expected to pick up more slowly than domestic travel as border restrictions are only gradually eased. It is widely expected that international travel demand will only return to pre COVID-19 levels in a few years,” Lam said. “As Hong Kong’s home carriers, we do not have the benefit of a domestic passenger network as a buffer. We already announced that we will continue to operate a minimal schedule over the next two months. Although it is our intention to slightly increase our passenger flight capacity from 3 percent in May to 5 percent in June, these are still subject to a potential relaxation in government health measures.

“At this stage, we still see no immediate signs of improvement. We expect that our average daily passenger numbers will remain at around 500 in May, and that business and leisure travel will remain severely impacted for the foreseeable future. Overall, we do not anticipate we will see a meaningful recovery for an extended period,” Lam added. “This is the biggest challenge to aviation we have ever witnessed. We are evaluating all aspects of our business to ensure that we remain strong and competitive when we emerge from this crisis. The world has changed dramatically over the past few months and it is imperative that we do everything in our ability to adapt to this new world in order to secure our future within it.”

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