A Cathay Pacific Airways employee wearing a protective mask pushes a luggage cart through Hong Kong… [+]
Passenger traffic at Hong Kong carrier Cathay Pacific Airways “continues to weaken significantly” after a drop in late January amid China’s coronavirus outbreak, the airline said on Monday.
The Cathay Pacific Group released combined Cathay Pacific and Cathay Dragon traffic figures for January 2020 that show decreases in the number of passengers and the amount of cargo and mail carried compared with a year earlier.
Cathay Pacific and its Cathay Dragon subsidiary carried 3,010,012 passengers last month – a decrease of 3.8% compared to January 2019. The two airlines carried 151,964 tons of cargo and mail last month, a drop of 8.9% compared to the same month last year.
Inbound passenger traffic to Hong Kong was down 40% year-on-year, a slight improvement over a 46% plunge in November and December. For the first time in the past few months Cathay saw growth in outbound traffic – 1% – though this was largely due to the Chinese New Year holiday starting earlier this year, Cathay Pacific Group Chief Customer and Commercial Officer Ronald Lam said in a statement.
“This was the most challenging Chinese New Year period we have experienced,” Lam said. “As the novel coronavirus outbreak in mainland China intensified towards the end of the holiday period, travel demand dropped substantially. With more governments worldwide having imposed travel restrictions on passengers from mainland China and in some cases Hong Kong, we are seeing continued cancellations of bookings.”
Cathay’s late January declines contrast with a better start at the beginning of the month. “We started off 2020 fairly positively, seeing satisfactory passenger traffic volume through the first three weeks of the year,” Lam said.
“Our performance deteriorated rapidly in the last week of January as the novel coronavirus situation became more severe, and it continues to weaken significantly. We saw significant cancellation of bookings within a short period of time.”
In response, Cathay has already reduced its overall passenger flight capacity in February and March by approximately 40%. “Passenger capacity reduction is also likely for April as we continue to monitor and match market demand. Meanwhile, we have kept our freighter capacity intact,” Lam said.
Fallout from the outbreak has also led to China flight suspensions by United, Delta and American Airlines, and is reducing business in China at many of the world’s largest restaurant and retail-related chains, such as Starbucks. It is also disrupting supply chains for companies such as Apple and GM that rely on Chinese suppliers for products and parts. (See related story here.) For Cathay, “the delay of the post-Chinese New Year resumption of manufacturing across mainland China has significantly affected both our Hong Kong and mainland China markets,” Lam said.
“The first half of 2020 was already expected to be extremely challenging financially. As a result of this additional significant drop in demand for flights and consequential capacity reduction caused by the novel coronavirus outbreak, the financial results for the first half of 2020 will be significantly down on the same period last year,” Lam said.
Lam, trying to sound upbeat, predicted Cathay’s values will help it eventually rebound from today’s “crisis.”
“We have an incredible brand with a reputation and track record of premium service and commitment to our customers that differentiates us from our competitors. These qualities and values remain at the heart of everything we do and are what will help us come back stronger when we emerge from this current crisis.”
The company’s Hong Kong-trade shares have lost 8.8% of their value so far in 2020.
–Follow me @rflannerychina
