Hong Kong Unrest Continues To Affect Cathay Pacific

This week, Hong Kong flag carrier Cathay Pacific published its October 2019 traffic figures. In the report, it says that the unrest in the country is still negatively contributing to its revenue and customer experience.

Hong Kong carrier Cathay Pacific blames the country’s unrest for low traffic figures. Photo: Simple Flying

Traffic figures down

In a press statement released on Wednesday (13th November 2019), Cathay Pacific posted a decrease in the number of passengers it carried within the month. Additionally, it has also suffered a reduced passenger load factor.

In its statement, the Cathay Pacific Group Chief Customer and Commercial Officer Ronald Lam lamented:

“It continues to be a challenging time for both the Cathay Pacific Group and for Hong Kong…We expect our second-half financial results will be significantly below those of our first-half. The short-term outlook remains challenging and uncertain.”

The airline and its regional brand Cathay Dragon amassed a 7.1% decrease in the number of passengers flown, in comparison to the same time last year. The figure for October 2019 sat at 2,740,830 passengers. Their combined passenger load factor was at 77.6% which was down four percentage points on the previous year. As a result, Cathay Pacific has reduced its passenger flight capacity. Capacity for November and December will lessen by 6-7%.

The figures represent an animosity towards traveling to Hong Kong in the present climate. Photo: Simple Flying

Animosity towards Hong Kong travel

Of late, some of the world’s airlines have been able to claw back their consumer interest in the wake of protests in Hong Kong. United Airlines said that it experienced increased passenger demand for flights to Hong Kong.

But of course, United is an American airline and the unrest is hitting airlines within the Hong-Kong region more severely. Despite the source of the initial protests being somewhat resolved, unrest still prevails as protests demand more civil liberties. And so, it’s almost inevitable that the flag carrier of Hong Kong will be the one to bear the brunt of the troubles. It’s struggling to appease its market.

Mainland China is a big market for tourism in Hong Kong. Mainland nationals are responsible for a significant portion of Cathay Pacific’s passenger traffic. However, the airline reported a 21.9% decrease in passengers flown on routes to and from the country. This leaves Cathay Pacific further unsure about its future for the remainder of 2019 since a 7-day holiday period for Chinese National Day was meant to bring in lots of tourists.

Cathay Pacific missed out on a big opportunity for passenger traffic in October as it struggles to garner interest. Photo: Simple Flying

And yet, it’s not just inbound traffic that Cathay Pacific is struggling with. The airline says both travel to and from Hong Kong has been affected by the unrest. It said:

“In October, demand for travel into Hong Kong remained weak with our inbound passenger traffic seeing a year-on-year decline of 35%, consistent with the trend seen in both August and September. The drop in outbound Hong Kong traffic was 13% in October…”

The antidote to unrest

But Cathay Pacific is busy trying to concoct remedies to its skinny figures. It hopes to woo its customers with excellent food and a remarkable customer experience. It has teamed up with a Michelin-star restaurant to offer long-haul Economy meals with luxury and has expanded its inflight entertainment. These are little changes but Cathay Pacific says it is still committed to the long-term vision for itself and Hong Kong as well.

What do you think Cathay Pacific’s short term future will look like? Let us know in the comments!