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  Cathay Pacific

  IATA/ICAO Code:

  CX/CPA

  Airline Type:

  Full Service Carrier

  Hub(s):

  Hong Kong International Airport

  Year Founded:

  1946

  Alliance:

  oneworld

  CEO:

  Ronald Lam

  Country:

  China (Special Administrative Region)

  Region:

  Asia

After a few years of struggling with riots and the pandemic, Cathay Pacific is starting to catch a glimpse of a rebound. In May, the airline carried close to 58,000 passengers, a 141% lift compared to May 2021, but still a massive 98% below pre-pandemic levels.

Cathay is already adding new destinations to the network

In the first five months of 2022, Cathay Pacific (Cathay) carried 185,000 passengers, a 59% increase over the same period last year. The airline operated 1,192 flights in May and 5,972 from January to May, a 19% increase on 2021 levels. It started 2022 operating flights to 29 destinations, and chief customer and commercial officer Roland Lam said Cathay is aiming to double that by the end of the year and "that as of June we are already halfway towards reaching this target with 45 destinations resumed." He added:

"We will be keeping a close eye on the opening up of travel activities in nearby countries, such as Japan and South Korea, and will look to operate flights to capture potential demand wherever possible."

From May 1, travel restrictions and quarantine requirements eased in Hong Kong, allowing Cathay to increase passenger flight capacity by 78% compared to April. While this was a welcome boost, the reality is that Cathay is still only operating at around 4% of pre-pandemic levels. With China enduring harsh lockdowns and closures, the May growth was driven by demand from North America, the UK and Europe. The increased capacity has provided better connectivity for transit passengers, particularly those flying onwards to Australia, the US and Europe.

Cathay has plenty of capacity to add when it's needed

In May, Cathay resumed flights from its base at Hong Kong International Airport (HKG) to Delhi's Indira Gandhi International Airport (DEL). It also resumed flights from Hong Kong to India's commercial hub Mumbai, flying to Chhatrapati Shivaji Maharaj International Airport (BOM). The situation in China is holding recovery back, with Cathay only able to operate limited capacity into the Chinese Mainland. According to ch-aviation.com, Cathay is using around half its fleet, utilizing 30 Airbus A350s, 24 A330s, 16 Boeing 777s and two Airbus 321neos on passenger flights. It also has 19 Boeing 747F freighters on active duty.

The lockdown in Shanghai has dampened cargo activity, although cross-border traffic between Hong Kong and Shenzhen is improving. Cathay's cargo and lifestyle businesses have jointly developed a door-to-door solution that enables Hong Kong customers to enjoy fresh fruit and vegetables sourced from premium producers in Northeast Asia and delivered directly to their homes. Lam said the tightening of restrictions in early 2022 limited Cathay's ability to operate beyond a fraction of their passenger services and significantly reduced cargo capacity. The recent adjustments to restrictions mean the airline has been able to add more capacity in the second quarter.

"Looking ahead to June and beyond, as travel demand continues to improve over the coming months, we will increase passenger flight capacity as much as is practicable under the confines of ongoing restrictions," Lam said. He expects Cathay to make a substantial loss in the first half of 2022 but believes it will be lower than the losses reported in the first half of 2021. In June, the Hong Kong Government agreed to extend the drawdown period of the HK$7.8 billion ($993.6 million) loan facility for 12 months to June 8, 2023. Lam said this gives Cathay the flexibility it needs to manage its liquidity position.

Like much of Asia, Cathay Pacific's recovery will only gather momentum when China fully reopens to the outside world. Given recent events, it seems that might be a way off yet.

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