Cathay Pacific continues to suffer as a result of the ongoing Hong Kong protests, according to the airline’s September figures. The airline experienced another significant fall in passenger load factor, particularly on flights from mainland China.
The negative effects of the ongoing Hong Kong protests appear to be taking their toll on Hong Kong’s largest carrier, Cathay Pacific. The turmoil of the last few months has pushed Cathay Pacific into the limelight for a number of less-than-positive reasons.
First of all, the airline has lost a number of veteran executives as a result of the turmoil, including its CEO, Rupert Hogg, and its Chairman, John Slosar. Then there has been the backlash against the airline’s stance towards striking and protesting staff. Finally, in a more unusual string of events, Cathay Pacific struggled with the presence of one or more phantom oxygen bottle depleters, who were eventually caught.
Reports by Flight Global today reveal the extent of the ongoing downturn in passenger load factor and ticket sales at the airline.
The Cathay downturn in numbers
The Hong Kong protests have had a quantifiable impact on Cathay Pacific’s passenger numbers and financial earnings for a good few months now. September’s figures revealed it was the third month straight in which Cathay Pacific has experienced weaker traffic and weaker earnings as a result of the protests.
Compared to the same time last year, Cathay and its subsidiaries carried 7.1% fewer passengers, for a total of 2.43 million throughout September. This goes alongside a 7.2 fall in passenger load factor.
Even more worryingly for Cathay Pacific and the other Hong Kong airlines, inbound passenger traffic to Hong Kong fell 38% from the same time last year. Outbound traffic was not as badly affected, only falling 9% by comparison.
Passengers are clearly being turned off the idea of traveling to Hong Kong, none more so than the mainland Chinese. Passenger numbers in this group fell 23.2% compared to last year.
What can Cathay Pacific do to weather the storm?
Cathay Pacific has been an unfortunate casualty of the Hong Kong protests. Because the city is its home base, it has been particularly vulnerable to the negative effects of the disruption.
Discussing the outlook for the rest of the year, Cathay Pacific’s Chief Customer and Commercial Officer, Ronald Lam, said:
“Our expectation is that the rest of 2019 will remain incredibly challenging for the airline and our second-half financial results are expected to be below those of our first-half.”
To cope with a fall in demand over winter, Cathay Pacific will be rearranging its flight schedules and capacity accordingly.
Unfortunately for Cathay Pacific, the ongoing turmoil in Hong Kong has scuppered plans for a US dollar bond deal.
The bond deal, which would have been the airline’s first not secured in Hong Kong dollars since 1996, was rejected by investors on Friday.
With no end to the Hong Kong upheaval in sight, Cathay Pacific is largely at the mercy of forces outside of its control for the foreseeable future.