Cathay Pacific faces financial pressure

Cathay Pacific's cargo volume declined in January, while the company also warned that its financial performance would be under pressure.

The airline's cargo volume in January was 151,964 tons, a year-on-year decrease of 8.9%.

At the same time, cargo load for the month decreased by 1.4 percentage points to 60.2%.

The passenger flow of this month may be affected by the time of Chinese New Year, this year's Spring Festival is earlier than 2019.

At the same time, the airline cut back on flights due to a coronavirus outbreak as demand for the Asia Pacific region plummeted.

Ronald Lam, chief customer and commercial officer of Cathay Pacific Group, said: "In the first three weeks of January, we saw fairly stable (cargo) demand for the entire aviation network. Our sales in mainland China were particularly prominent, with a tonnage year-on-year Growth. However, by the last week of January, overall demand had fallen sharply as manufacturing in mainland China stalled during the Spring Festival. "

He said: "The delay in the resumption of manufacturing in the Chinese mainland after the Spring Festival has had a significant impact on both Hong Kong and the Mainland market." However, demand elsewhere in our network is still strong, especially on trade routes where passenger capacity has fallen significantly. "

He warned that the outbreak could affect its financial performance.

Lam said: "It is expected that in the first half of 2020, there will be great financial challenges."

"In the first half of 2020, financial results will be significantly lower than the same period of last year due to the sharp decline in demand for flights and the decline in capacity caused by the new coronavirus outbreak."

In releasing its traffic data for January, the oneworld family also announced that it would further reduce its capacity in February and March.

Cathay Pacific and Cathay Dragon will reduce passenger traffic by 40%. The company notes that this is more than the 30% capacity reduction announced earlier this month.

Although Hong Kong is not the center of this coronavirus outbreak, some countries have imposed travel restrictions on Hong Kong. Lam said this has led to an increase in cancellations.

Since last year, Cathay Pacific has faced financial challenges in the first half of 2020 in the context of turbulent local conditions.