Volumes and yields predicted to grow in 2017

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2016 has been a year of two halves, with a tough first half, but improvements in the second, Cathay Pacific general manager cargo sales & marketing, Mark Sutch (pictured below) tells Air Cargo Week staff writer, James Muir.

Last year had an exceptional start, helped by the US West coast seaport disruption before tapering off while 2016 started off slowly, both in terms of tonnage and yield, then picking up in the second half.

Sutch comments: “It’s not unusual in airfreight (particularly when based in Asia Pacific) to have a year of two halves and this has been very much the case.”

September to December has been strong, but the transpacific market is slowing in the run up to Christmas, though Sutch says Westbound out of Hong Kong is expected to remain strong up to Christmas itself, giving him confidence that 2017 will start well.

He tells ACW: “I am confident that 2017 will start on a significantly strong footing than 2016. Both yield and tonnage will grow – yield considerably.”

HKG0 20121022 HONG KONG, HONG KONG : Terry Lo, CEO of GLS and of Cathay Pacific Airways, shown in Hong Kong on Monday, 22 October, 2012.

 

Something else to look forward to next year is Cathay Pacific’s joint business agreement with Lufthansa Cargo, which is due to go live on 1 February 2017. Lufthansa has already moved to the Cathay Pacific Cargo Terminal, which Sutch says has been very smooth and forwarders now have a single pick-up and drop-off area for services.

Sutch says: “CX/LH will offer a seamless metal neutral product to the market. We believe this will bring customer efficiencies in HKG/ FRA and other points between HKG & Europe.”

The biggest benefits for customers, Sutch says include a single point of handling in both Frankfurt and Hong Kong, a greater choice of flights, a joint pool of capacity and a greater spread of flights across the week.

Nearer to home, Sutch says Cathay Pacific has a very extensive network across Asia Pacific and much of the future growth will come from passenger aircraft with the arrival of Airbus A350s.

He also says: “We shall continue to look for new freighter opportunities as we have recently done with launching new ports of Portland and Wellcamp Brisbane West.”

Hong Kong – North America remains Cathay Pacific’s busiest trade lane, followed by Hong Kong – Europe, with India proving to be a strong market in recent years.

Cathay Pacific Cargo Terminal
Cathay Pacific Cargo Terminal

Sutch tells ACW: “IntraAsia is a growing market and given the number of widebody passenger services we offer we have room to grow in this key sector.”

He believes the growing domestic markets in China and India, and the development of South East Asia will provide a base for air cargo to grow in the future.

Sutch says: “At CX we believe in operational excellence, handling efficiency, network and frequency spread and a combination between freighter capacity and belly.”

Across the network, electronic consumer goods have remained popular from Asia to North America and Europe, while
mail driven by e-commerce and perishables have registered strong growth. Sutch says perishable demand is coming from China with good growth from North America, Australia and Europe.

Outsized cargo is also performing well, with ExpertLift product. Sutch comments: “Although hard to predict this market it has been strong in recent months and we expect our expertise in this area will set us well for future growth on 2017.”