Cathay Pacific ended a “challenging” 2019 on a mixed note, with fewer passengers carried, but slight improvement in load factor, especially on long-haul routes.
For the month of December Cathay, together with subsidiary Cathay Dragon, carried 2,994,830 passengers, representing a 3.6% decrease compared to the same month a year earlier.
Inbound passenger traffic for both carriers continue to be hit, falling 46% year-on-year. Cathay Pacific Group chief customer and commercial officer Ronald Lam notes that demand was particularly weak on regional routes from China, Taiwan and Japan.
Outbound traffic was down 4%, a “further improvement over the previous few months”, but still “significantly below” what was expected of a holiday month, Lam adds.
Nonetheless, Cathay arrested the slide in passenger load factor — for December, it saw an increase of 1.2 percentage points to 85%. This was due to a 1.3% reduction of capacity, the airline states.
It also saw its long-haul routes perform better for December, with more passengers carried year-on-year for its South Asia, Middle East, Africa, North America and South West Pacific sectors.
Cathay also saw transit traffic — on which it was “heavily reliant” on for the past few months in light of weakening inbound and outbound demand — grow by 15%.
For the year ended 31 December, Cathay saw an overall dip of 0.7% in passengers carried, compared to 2018.
Overall load factor slipped 1.8 percentage points to 82.3%, while ASKs rose 5.1%.
“Intense competition, particularly during the non-peak period, along with our greater reliance on transit traffic have continued to place significant pressure on yield,” says Lam.
He adds that 2020 will continue to present challenges for the carrier. Even though there are pockets of opportunities around the Chinese New Year period in late January, the carrier notes it is seeing “a significant shortfall…especially from inbound traffic” for the period after.
Cathay announced in December that it would be slashing overall seat capacity in 2020 by 1.4%, instead of its intended plans of a 3.1% growth.
It also flagged that its second-half financial results will be “significantly below” its first half.
Cathay and Cathay Dragon were among carriers hardest hit by anti-government protests that began in June in Hong Kong.