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Tue, 24 January 2023

Cathay Pacific Reports December Traffic; Expects Return to Pre-Pandemic Flight Capacity by End-2024

(24/01/23)  Cathay Pacific carried 801,088 passengers in December 2022, an increase of 768.7% compared with December 2021, but a 73.3% decrease compared with December 2019.

The months revenue passenger kilometres (RPK) increased 545.2% year-on-year, down 68.4% on December 2019.

Cathay's passenger load factor increased by 46.7 percentage points to 83.3%, while capacity, measured in available seat kilometres (ASK), increased by 183.5% year-on-year, a decrease of 67.8% compared with pre-pandemic December 2019 levels.

The number of passengers carried in 2022 increased by 291% against a 51.6% increase in capacity and a 258.3% increase in RPK, as compared with 2021.

Cathay Pacific A330 reg: B-LBK. Picture by Steven Howard of TravelNewsAsia.com Click to enlarge.
Cathay Pacific A330 reg: B-LBK. Picture by Steven Howard of TravelNewsAsia.com

December saw a drastic uptick in travel demand with Christmas being the first major holiday since travel restrictions in Hong Kong were lifted, although we were still only operating about 32% of pre-pandemic passenger flight capacity levels. We carried over 25,800 passengers per day on average, said Chief Executive Officer, Ronald Lam. Demand was overwhelming for travel to short-haul leisure destinations as we continued to ramp up our frequencies. We also added more destinations in December, including Sapporo, Fukuoka, Penang and Dhaka, ending the year with close to 60 destinations in our network double the 29 we flew to in January 2022.

The airline carried 106,471 tonnes of cargo last month, a decrease of 21% compared with December 2021, and a 40% decrease compared with the same month in 2019.

The months cargo revenue tonne kilometres (RFTK) decreased 22.6% year-on-year, a drop of 34% compared with December 2019.

Cargo load factor decreased by 16.9 percentage points to 67.3%, while capacity, measured in available cargo tonne kilometres (AFTK), decreased by 3.2% year-on-year and 35% on December 2019.

In FY2022, tonnage decreased by 13.4% against a 19% decrease in capacity and a 29.8% decrease in RFTK, as compared with 2021.

In terms of cargo, overall market demand continued to be flat in December, as was the case for the fourth quarter. Tonnage saw a mild month-on-month increase of 3% against a 4% increase in cargo flight capacity. Overall in December, we operated 65% of pre-pandemic cargo flight capacity levels, said Mr. Lam.

Cathay Pacific's FY2022 Financial Performance

Based on a preliminary review of unaudited consolidated management accounts, the Cathay Pacific Group is expected to record a consolidated loss attributable to shareholders of approximately HK$ 6.4 - 7 billion. This compares to the attributable loss to shareholders of HK$5.5 billion for the year ended 31 December 2021.

H2 2022 results for the groups airlines and subsidiaries were a marked improvement over the H1 2022 results, although still a small loss overall for FY2022. However, the results from associates, the majority of which are recognised three months in arrears, and which in some cases have already been announced, include significant losses.

I am very encouraged to see a trend of continuous improvement in our operations and financial performance for our airlines and subsidiaries in the second half of 2022, Mr. Lam said. Progressive relaxations to travel restrictions and quarantine requirements in Hong Kong enabled us to be operating cash generative overall in the second half of 2022.

Cathay Pacific is expected to publish its annual results in March 2023.

Looking Ahead

Looking ahead into 2023, we are very excited to be firmly on the path to rebuilding Cathay Pacific and the Hong Kong international aviation hub. Nevertheless, challenges still remain and we are taking a measured and responsible approach to our rebuilding efforts, said Mr. Lam. We remain fully committed to restoring connectivity and capacity at our home hub. As a Group, which includes passenger airlines Cathay Pacific and HK Express, we anticipate we will be operating about 70% of pre-pandemic passenger flight capacity by the end of 2023 with the aim of returning to pre-pandemic levels by the end of 2024.

In terms of passenger travel, we expect demand will continue to be strong in January and the Chinese New Year period, driven by leisure traffic from Hong Kong. Following the return of quarantine-free travel between Hong Kong and the Chinese Mainland, we are continuing to add more flights and more destinations as quickly as is feasible. We aim to operate more than 100 return flights per week to and from 14 cities in the Chinese Mainland by the end of February.

Concerning cargo, the easing of restrictions for cross-border trucking between Hong Kong and the Chinese Mainland is welcome news. On the other hand, with COVID-19 still impacting various parts of the country, coupled with Chinese New Year occurring in January, the air cargo market will continue to experience challenges until mid-February. We will remain agile in our response to these new challenges.

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