Cathay Pacific’s interim 2015 results show a 2.5 per cent fall in cargo revenue, despite strong demand on some principal cargo routes.
Increased demand in cargo began last year and continued through the first few months of 2015, but fell away in the second quarter, Cathay reports.
The group’s cargo revenue for the first six months of 2015 fell by 2.5 per cent year on year to 11,376 million Hong Kong dollars ($1.4 billion). Capacity for Cathay Pacific and sister airline Dragonair grew by 8.9 per cent and the load factor increased by 0.9 percentage points to 64.1 per cent.
Despite this, says Cathay, “strong competition, overcapacity in the industry, and a significant reduction in fuel surcharges put downward pressure on yield, which dropped by 11.1 per cent to 1.93 [Hong Kong dollars].” More encouragingly, strong demand was seen in some of Cathay’s main cargo routes. The most notable upswing was seen on routes to and from North America, partly prompted by industrial action at major shipping ports on the West Coast of the US. Intra-Asia shipments also grew, but traffic to Europe fell short of expectations. The first half of 2015 saw Cathay change its fleet. It had been agreed in 2014 that six Boeing 747-400 Freighters in the Cathay Pacific fleet would be sold back to Boeing.
Two of these freighters have since been delivered, one in November 2014, the other in July 2015. The remaining four freighters will leave the fleet by the end of 2016. As of 30 June 2015, the group had 72 aircraft on order for delivery up to 2024.
Cathay Pacific chairman, John Slosar, says: “We usually perform better in the second half of the year than in the first. We expect our business to do well in the remainder of 2015 and we will continue to focus on providing high quality products and services.
“We will continue to invest in aircraft, our products and the development of our network. Our financial position remains strong.”