The Cathay Pacific Group saw its February traffic results take a significant hit from the coronavirus outbreak, as it posted an unaudited loss of more than HK$2 billion ($257 million) for the month.
The group, which earlier warned of a loss in the first half of the year, will operate a “bare skeleton” passenger flight schedule for April, as it cuts 90% of capacity across its network, as it anticipates further slumps in travel demand.
In February, Cathay Pacific and Cathay Dragon carried 1,008,644 passengers, a 64.4% drop year-on-year. This was also lower than the just over 3 million passengers it carried in January. RPKs for the month fell 54% compared to the same period a year earlier, led by a dramatic 87.3% decrease in RPKs for Mainland China.
Meanwhile, capacity as measured in ASKs fell 29.3%. By market, Mainland China, which in February bore the brunt of the coronavirus-related travel restrictions and itself imposed lockdowns in some cities, saw ASKs fall 76.1%. North east and South east Asia both registered drops in ASKs of above 35%.
Consequently, passenger load factor for the month fell 28.6 points to 53.1%. Yield was also “significantly impacted”, notes group chief customer and commercial officer Ronald Lam.
“On a typical day following the Chinese New Year peak we would normally carry around 90,000 passengers; towards the end of February, that figure dropped to below 20,000,” says Lam.
Lam reiterates that the “scale of the challenge we are currently facing is unprecedented”.
“Our advance passenger bookings show no clear signs of recovery at this stage, and the gap in bookings compared to 2019 continues to widen,” he states.
On the group’s deep capacity cuts, Lam adds: ““If we do not see a relaxation of travel restrictions in the near future, we expect the same arrangement will have to continue into May.”
In its full-year results release on 11 March, Cathay warned that it was expecting a “substantial loss” for the first half of the year, as the double-whammy of political unrest — in the latter half of 2019 — and the coronavirus outbreak continues to depress travel demand in and out of the territory.
CORONAVIRUS SINKS SIA FEBRUARY TRAFFIC
Singapore Airlines, which also released its February traffic figures the same day, also took some heat from falling travel demand.
For the month, the SIA Group’s carriers — including SilkAir and Scoot — carried 2.18 million passengers, 21.8% lower year-on-year. RPKs for the period fell 17%, with regional unit SilkAir suffering the worst slump — it saw RPKs drop nearly 38% year-on-year.
ASKs across the group dipped 2.4%, leading to a 12.1 percentage point decrease in passenger load factor for the month, to 69.1%.
Passenger load factor across all sectors saw drops, with East Asia — which includes Mainland China and Hong Kong — seeing the worst performance. SIA and SilkAir both registered significant load factor decreases for the region, at 26% and 21% respectively.
Like Cathay, SIA says March will continue to be a difficult month.
“Market conditions have continued to deteriorate in March and, with [World Health Organisation] declaring COVID-19 a pandemic and multiple countries issuing travel advisories and restrictions, travel demand is expected to weaken significantly in the near term,” it states.