Cathay Pacific Group Chief Customer and Commercial Officer Ronald Lam said: “Passenger volume showed signs of slight improvement in the beginning of July, fuelled by a boost in the number of transit passengers via Hong Kong. We increased our passenger flights by a slight amount to approximately 7% of the normal capacity, up from about 4% in June, and gradually resumed some services to Chengdu, Xiamen, Frankfurt and Toronto.
“However, demand tapered down towards the end of the month as new waves of COVID-19 cases arose in numerous countries. As a result, passenger volume increased at a lower rate than capacity for July, and load factor further dipped to 23.4%. There were a few services that performed better than expected comparatively, notably Xiamen.
“Cargo continues to be the better performer of the business. Tonnage improved month-on-month by approximately 10%, though this was still significantly down from last year’s levels due to the significant reduction in cargo capacity provided by belly space on our passenger flights. Load factor remained high at 75.8%. Certain markets performed particularly well, notably the Indian subcontinent, which recorded a noticeable uptick as local lockdown measures were eased. We also saw reasonably strong month-end rushes for airfreight demand in Hong Kong and the Chinese mainland.
“Further to our existing efforts to increase available cargo capacity, since early July we have begun operating cargo-only passenger flights using select converted Boeing 777-300ER aircraft that have had some of the seats from the Economy Class cabin removed. This has enabled us to load shipments such as personal protective equipment (PPE) and garments in the passenger cabins inside fire-retardant cargo bags.”
“The global aviation sector continues to face major headwinds as a result of the COVID-19 pandemic and the associated travel restrictions that have been implemented. The International Air Transport Association (IATA) has now adjusted its forecast for when international passenger demand will return to pre-pandemic levels to 2024, one year later than its previous estimate.
“As new waves of COVID-19 cases have emerged in Hong Kong and elsewhere, we have adjusted our passenger flights for August to approximately 8% of the normal capacity, which remains subject to the potential further relaxation or tightening of government health measures. We expect that our airlines will operate a similar level of passenger flight capacity in September.
“Meanwhile, we welcome the resumption of transit services via Hong Kong International Airport for passengers from the Chinese mainland, which becomes effective tomorrow. This will help enhance our passenger volume via the Hong Kong hub, and offer essential connections from the Chinese mainland to different parts of the world.
“In addition to the COVID-19 pandemic, we have to contend with a looming global recession and geopolitical tensions, which are expected to have a negative impact on both air travel and cargo demand. It is obvious that there will be no return to normal demand conditions any time soon.
“Our recapitalisation, which was completed earlier this week, provides us with a firm platform from which to move forward with our comprehensive review of our operations, and we will be making our recommendations to the board by the fourth quarter of this year on the optimal size and shape of the business to be competitive in the new normal of our industry.”