Cathay Pacific reported that its cargo revenues decreased by 17.2% year-on-year in H1 2016 to HK$9,415m, owing largely to its yield falling by 17.6%.
The airline’s cargo load factor fell by 1.9 percentage points to 62.2%, as tonnage carried declined by 0.2% and capacity increased by 0.6%. Cathay Pacific described the overall market as “weak” in the period, although tonnage “stabilised” in the second quarter.
The fall in yield was down to “strong competition, overcapacity and the suspension (from April) of fuel surcharges.” Continued weak demand was noted on European routes while transpacific demand fell in the period. Total fuel costs for all operations (passenger and cargo), before the effect of hedging, were down by 31.9% year-on-year.
On a more positive note, the airline noted that shipments of pharmaceuticals and mail (the yield on which is above average) increased by 80% and 11% respectively.
Looking at some routes in more detail, demand for shipments to and from the Indian sub-continent increased, although airport congestion in Dhaka was limiting. Demand for shipments from Asia was robust, but yield was under pressure. Northeast Asia “showed resilience with steady exports of electronics, machineries and perishable products”. On Americas to Asia routes, perishable volumes grew strongly.
In terms of network adjustments, Cathay Pacific launched a passenger service to Madrid in June and will introduce services to London Gatwick in September. There were no changes to the Group’s freight network in the period, though a service to Portland will be introduced in November.
Source: Cathay Pacific Cargo