Cathay Pacific will slowly reinstate capacity in June and July, even as it expects capacity in the subsequent months to continue to be “substantially reduced”.
This also marks the first time since the coronavirus outbreak emerged that the carrier will be adding capacity to its already-pared down network.
For June, Cathay and sister carrier Cathay Dragon will operate 3.5% capacity, marginally higher than the 3% capacity operated in May.
This will increase again in July, when both carriers will operate at approximately 9.4% capacity.
Cathay group customer and commercial chief Ronald Lam stressed that the plans to reinstate capacity “remain contingent on the further relaxation of travel restrictions around the world and are subject to change”.
Adds Lam: “We will continue to monitor demand and adapt our passenger schedule accordingly, though we expect we will be operating a substantially reduced schedule over the coming months.”
Lam’s comments come as Cathay released its traffic figures for May, which again saw significant year-on-year decreases in passenger traffic.
For the month, Cathay and Cathay Dragon carried nearly 18.500 passengers, a 99.4% year-on-year drop. However, this was still higher than April’s figure of around 13,700 passengers.
Compared to the same month last year, overall RPKs fell 99.1%, while ASKs were slashed 97.5%. Passenger load factor dipped 53.3 percentage points to 29.6%.
Lam notes that demand continued to be weak, and that both airlines carried just 1% of the number of passengers they carried in the same month last year, with an average of 600 passengers a day.
Cathay and Cathay Dragon still maintained their “skeleton passenger schedule” covering 14 points in their network, he adds.
Cathay reiterated that it anticipates a “substantial loss” for the first half of the year.
On 9 June, the carrier announced a HK$39 billion ($5.03 billion) recapitalisation plan, which includes a significant bailout from the Hong Kong government. Cathay, which has been hard hit by the pandemic, disclosed it had been bleeding HK$2.5 to HK$3 billion in cash a month. Passenger revenue has also been reduced to just 1% of what it used to earn in past years.
In the longer term, Cathay says that its business model “will be re-evaluated”. By the end of this year, Cathay’s management will make recommendations to its board on the “optimum size and shape” of the group.