In this file photo, a Cathay Pacific passenger airplane is taxied onto the runway as other aircrafts belonging to the local flagship carrier are seen parked on the tarmac at Hong Kong's Chek Lap Kok International Airport on March 10, 2020. (ANTHONY WALLACE / AFP)
Hong Kong’s flagship carrier Cathay Pacific Airways said on Monday it expects to see a recovery in the second half of next year and that passenger capacity will remain under 50 percent for overall 2021.
The airline planned to operate about 10 percent of its pre-pandemic passenger flight capacity for the rest of the year and less than a quarter of pre-pandemic capacity in the first half of 2021, according to a filing to the Hong Kong Stock Exchange.
Ronald Lam Sui-por, Cathay Pacific Group chief customer and commercial officer, said the expectation is already “the most optimistic” that they can responsibly adopt at this moment among the multiple scenarios studied.
Cathay Pacific planned to operate about 10 percent of its pre-pandemic passenger flight capacity for the rest of the year and less than a quarter of pre-pandemic capacity in the first half of 2021, according to a filing to the Hong Kong Stock Exchange
The forecast is also based on an assumption that “the vaccines currently under development prove to be effective and are widely adopted in our key markets by summer 2021,” said Lam.
The aviation industry has been hit hard by the coronavirus pandemic since the start of this year as travel restrictions have been imposed to contain the spread of COVID-19 and many borders remain closed.
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The International Air Transport Association has since downgraded its full-year passenger traffic forecast for 2020 to reflect a drop of 66 percent. It anticipates passenger travel will return to pre-COVID-19 levels until 2024.
Cathay announced that the airline’s passenger numbers dropped 98.1 percent in September compared with the same period a year earlier. Passenger load factor fell 48.8percentage points to 24.9 percent, while capacity, measured in available seat kilometers, decreased by 91 percent.
“September rounded off what has been an incredibly difficult summer, traditionally the peak passenger travel season of the year. We continued to operate minimal capacity - just 9 percent in September - a marginal month-on-month increase from about 8 percent in August,” said Lam.
Transit passengers accounted for about 33 percent of the airline’s total traffic in September. Demand from the Chinese mainland has gradually increased since the ban on transit traffic through Hong Kong International Airport was partially eased in mid-August.
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In the first nine months of 2020, the number of passengers carried decreased 83.2 percent year-on-year.
Meanwhile, cargo demand remains depressed as well and is only recovering at a slower-than-expected pace due to capacity constraints. Cathay’s tonnage carried improved about 7 percent in September month-on-month, though this was still substantially below pre-COVID-19 levels.
Cathay was reportedly to back a restructuring plan this week that included staff redundancies and pay cuts. The airline said in June that it was reviewing its strategy in light of the travel downturn and would announce some “tough decisions” in the fourth quarter.
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