By Will Lee
Cathay Pacific Unveils Gloomy Forecast
Cathay Pacific is celebrating its 75th anniversary. However, the airline is also facing its biggest challenge at the same time.
The Hong Kong-based carrier announced its traffic figure for August, when it carried 135,353 passengers, an increase of 278.4% compared to August 2020, but a 95.3% decrease from August 2019.
Earlier, Cathay Pacific forecasted to operate 30% of pre-pandemic by the end of the year, but many global travel restrictions remain in place. The airline revised its forecast and expects to maintain similar passenger capacity levels to last month for the remainder of the year.
In response to the increase of student traffic, the airline has seen “some improvement” in the performance of its passenger business in the last month. The passenger capacity increased by 81% compared with July and the load factor reached 46.4%, the highest number since the pandemic begun. Cathay Pacific currently operates 13% of pre-pandemic levels.
In the wake of the surge in demand, Cathay Pacific has resumed services to Chicago, Boston, Manchester, U.K, Paris, Phuket, Thailand and Qingdao, China. Meanwhile, its New York, San Francisco and Los Angeles services have seen capacity increases. Also, the airline has increased its frequencies to the Shanghai to three times a day.
Since the pandemic has begun, Hong Kong has implemented the most restrictive Covid-19 policies. Last month, the government tightened up quarantine rules for travelers from 16 territories, and inbound traffic has been seen a drop after Aug. 20 as a result.
During the pandemic, cargo services have become the airline’s main source of income. Cathay Pacific’s cargo capacity has increased 9% month on month, although August is not the cargo peak season. The cargo capacity was approximately 66% of its August 2019 pre-pandemic levels. According to Hong Kong International Airport, cargo recorded a year-on-year increase of 15.5% to 429,000 tonnes.
Cathay Pacific emphasized that it will focus on prudent cash management, targeting cash burn of less than $128.4 million per month for the rest of 2021. For cargo, the airline forecasts a “strong peak season driven by the need for inventory replenishment.”
In response to prolonged pandemic, Cathay Pacific will close its London pilot base following the closure of bases in Australia, New Zealand, Canada and Germany. London-based pilots could be laid off or relocate to Hong Kong.
“The decision is not one we have taken lightly and does not reflect on the professionalism of the pilots based in London.” The airline said in a statement. Meanwhile, the struggling airline is reviewing the U.S pilot bases.
Earlier, the airline mandated its employees take the vaccine, saying about 93% of Hong Kong-based employees have been inoculated, including 99% of pilots and 93% of air crew. According to local media, around 60 to 80 staff will be sacked after refusing to take the vaccine.