Cathay Pacific's July traffic figures are out, and they paint a mixed picture. Passenger numbers were down 98.4% compared to July 2019. But the airline is faring better in mid-2021 than in mid-2020. Cathay Pacific also sees some small green shoots of growth - not much, but enough to lift the mood.

Cathay Pacific improves against 2020 figures

Cathay Pacific carried 54,092 passengers last month, an increase of 25.8% compared to July 2020, but a 98.4% decrease compared to July 2019. July's revenue passenger kilometers (RPKs) rose 22.6% year-on-year but were down 97.6% versus July 2019.

Passenger load factor increased by 5.1% to 28.5%. Capacity, measured in available seat kilometers (ASKs), increased by 0.7% but remained 92.9% down on July 2019 levels. Overall, across the first seven months of 2021, the number of passengers carried dropped by 95.2% against an 81.9% decrease in capacity and a 94.3% decrease in RPKs, as compared to the same period for 2020.

Cathay Pacific's Group Chief Customer and Commercial Officer Ronald Lam commented,

"We did see some improvements in demand. We carried a total of 54,092 passengers in July, averaging 1,745 per day. On 29 July, we carried 2,585 passengers, the most in a single day so far in 2021. Meanwhile, our passenger load factor of 28.5% was the highest it’s been over the past 12 months."

Signs of life on some parts of Cathay Pacific's network

“Transit traffic from the Chinese Mainland to the US and Canada remained robust," said Mr Lam. In July, the airline had 20,795 RPKs available to and from mainland China (7% of total network RPKs) and 155,418 RPKs (52% of total network RPKS) available to and from North America. These numbers were up 217% and 21% on the July 2020 numbers.

"We captured a few pockets of demand for flights from the Chinese Mainland to Southeast Asia, in particular to Jakarta and Hanoi," Lam added. "The increase in demand compensated for the loss of traffic from flights that remained suspended last month, notably from the UK, the Philippines, and Indonesia.

"Meanwhile, we resumed passenger services to Auckland, Hanoi, Phnom Penh, Tel Aviv, and Wuhan."

Airlines CCO says Cathay Pacific is still facing challenges

With no domestic network to fall back on, Cathay Pacific has suffered more than most airlines over the last eighteen months. But the airline is eyeing operating approximately 30% of its 2019 passenger capacity by the fourth quarter of 2021.

"This is highly dependent upon operational and customer travel restrictions being relaxed," Mr Lam notes. He says Hong Kong SAR Government’s latest simplifications to the entry requirements for passengers into Hong Kong is seeing some demand return. But second, third and fourth waves, travel restrictions, and quarantine requirements in Hong Kong and elsewhere continue to drive down demand for international flights.

"We are still facing many challenges," Cathay Pacific's CCO says. But he does see some bright spots.

“Looking ahead on the passenger front, student traffic to the US and the UK is expected to give us a slight boost to our business in August and September. Flights on peak dates are already full, and flights on earlier departure dates are also likely to see increased bookings as demand continues to come in."

The vast bulk of Cathay Pacific's employees have already booked or received their vaccinations. Mr Lam says this will position the airline nicely when normal flying resumes. But he also acknowledges that is unlikely to happen until sufficiently high vaccination rates around the world are achieved.