Cathay Pacific Group Releases Combined Traffic Figures for September 2019

Cathay Pacific Group today released combined Cathay Pacific and Cathay Dragon traffic figures for September 2019 that show decreases in the number of passengers carried and the amount of cargo and mail uplifted compared to the same month in 2018.

Cathay Pacific and Cathay Dragon carried a total of 2,426,961 passengers last month - a drop of 7.1% compared to September 2018. Passenger load factor decreased by 7.2 percentage points to 73.6%, while capacity, measured in available seat kilometres (ASKs), rose by 9.8%. In the first nine months of 2019, the number of passengers carried grew by 1.3% and capacity increased by 6.9%, as compared to the same period for 2018.

The two airlines carried 172,637 tonnes of cargo and mail last month, a drop of 4.4% compared to the same month last year. The cargo and mail load factor fell by 3.7 percentage points to 65.5%. Capacity, measured in available freight tonne kilometres (AFTKs), was up by 0.1% while cargo and mail revenue freight tonne kilometres (RFTKs) dropped by 5.3%. In the first nine months of 2019, the tonnage fell by 6.8% against a 0.7% increase in capacity and a 7.0% decrease in RFTKs, as compared to the same period for 2018.

Cathay Pacific Group Chief Customer and Commercial Officer Ronald Lam said: "September was another challenging month for our passenger business, with revenue adversely affected by weakened market sentiment, particularly for travel into Hong Kong. Passenger load factor was down 7.2 percentage points and inbound passenger traffic dropped by 38% - both unchanged from August. Outbound traffic was down 9% year-on-year, a slight improvement over the 12% drop seen last month. Transit traffic via Hong Kong remained relatively stable.

"The mainland China market has been hit especially hard and we observed very weak demand for travel over the National Day holiday - traditionally a very strong period. Our India routes were the main bright spot, buoyed by strong demand between India and North America. Intense competition together with an increasing reliance on transit passengers over the short term has continued to apply additional pressure on yield.

"We continue to see a significant shortfall in inbound bookings for the remainder of 2019 as compared to the same snapshot last year. This has been felt most strongly with bookings from mainland China and our other Asian markets. As previously announced, we are taking a number of short-term tactical measures to respond to this shortfall, most notably realigning capacity for the winter season (from end October 2019 to end March 2020).

"As anticipated, our cargo business showed signs of improvement compared to August as we stepped into air freight’s traditional high-demand season. Most markets saw a better month-on-month performance and we mounted a number of charter operations on top of our scheduled services to meet added demand for air freight coinciding with the release of new electronic products. However, the overall market remains challenging and competitive with tonnage carried and load factor for the year to date still significantly below the same period last year.

"We continue to closely monitor market sentiment and global travel trends in order to best align passenger and cargo capacity with demand. Meanwhile, our investment in and commitment to the customer experience is ongoing. For example, a number of new soft products and dining services in First and Business Class cabins are being unveiled right now, specifically mattresses and slippers in Business, and improved pillows and blankets in both Business and First. The inflight entertainment offering across all our cabins has also been substantially increased with nearly four-times the quantity of content on many flights. This is all intended to give customers more reasons to fly with us. Nevertheless, our expectation is that rest of 2019 will remain incredibly challenging for the airline and our second-half financial results are expected to be below those of our first-half."