An HSBC report has warned that the resumption of direct flights between Mainland China and the USA could impact Cathay Pacific’s long-haul traffic, even as the Hong Kong-based carrier rebounds to a strong recovery this year.
Cathay has “benefitted “ from Mainland Chinese travellers using Hong Kong as a gateway to the USA, says the 24 November report, in the months after China reopened its borders.
USA-China flights have been slower to recover after Beijing dropped most of its ‘zero-Covid’ restrictions, largely due to geopolitical tensions between the two nations.
However, in recent weeks, Chinese and US carriers have announced the resumption of several direct flights. Hainan Airlines, for instance, resumed flights between Beijing and Boston on 26 November, following compatriot Air China’s reinstatement of flights between Beijing and Washington Dulles days earlier.
Even with the increased competition, the HSBC report expects Cathay’s passenger yields to “hold up pretty well” through the year-end, given strong passenger demand.
The Oneworld carrier expects to report its first full-year profit in three years, amid a continued recovery in passenger travel demand, as well as better-than-expected cargo demand.
Cathay forecasts the number of flights to be at around 70% of pre-pandemic levels by the end of this year, with non-transit passengers - passengers travelling to and from Hong Kong - expected to be at 95% pre-pandemic levels.
On cargo, the report says Cathay will benefit from a “thriving” Chinese cross-border e-commerce sector. The airline had attributed improvements in its third-quarter cargo performance to strong e-commerce demand from China, and expects cargo load factors to improve through December.