Cathay Pacific has released its traffic figures for December 2021 together with an update on its performance in the year ended 31 December 2021, which continued to reflect the airline’s substantial capacity reductions in response to significantly reduced demand as well as travel restrictions and quarantine requirements in Hong Kong.
Cathay Pacific carried a total of 92,219 passengers in December 2021, an increase of 130.6% compared to December 2020, but a 96.9% decrease compared to the pre- pandemic level in December 2019. The month’s revenue passenger kilometres (RPKs) rose 156.5% year-on-year, but were down 95.1% versus December 2019. Passenger load factor increased by 18.2 percentage points to 36.6%, while capacity, measured in available seat kilometres (ASKs), increased by 28.6%, but remained 88.6% down on December 2019 levels. In the full year of 2021, the number of passengers carried dropped by 84.5% against a 61.8% decrease in capacity and a 79.5% decrease in RPKs, as compared to 2020.
The airline carried 134,691 tonnes of cargo last month, an increase of 12% compared to December 2020, but a 24.1% decrease compared with the same period in 2019.
Cathay Pacific Group is expected to record a consolidated loss attributable to shareholders of approximately HK$5.6-6.1 billion. The airline stated that while the expected loss is substantial, it compares favourably to the attributable loss to shareholders of HK$21.6 billion for the year ended 31 December 2020. The improvement was primarily driven by strong cargo demand, high cargo yield and load factors, together with continued focus on effective cash and cost management. In addition, the full-year 2020 result included the recognition of one-off items such as impairment charges and restructuring, which were significantly reduced in 2021.
Chief Executive Officer Augustus Tang noted the impact quarantine restrictions were having on its operations. “These measures will have a significant impact on our passenger and cargo flight capacity. While we are fully committed to increasing our cargo capacity when conditions allow and to upholding Hong Kong’s international aviation hub status, for the month of January 2022, cargo has reduced to 20% of its pre-pandemic capacity and passenger flights have reduced to around 2% of their pre-pandemic capacity.
“Regrettably, the capacity reduction will have an impact on Cathay Pacific’s business and we have been evaluating the potential impact of these measures on our operations and cost base. According to our preliminary assessment, we expect these capacity levels to result in an operating cash burn of HK$1.0-1.5 billion per month from February.
“Until conditions improve, we are doing everything in our power to maximise capacity, and estimate that mitigation measures to increase crew resources will enable us to operate approximately an additional 5% more cargo flight capacity than we are currently operating.”
Tang added that on the passenger side, the airline will “strive to maintain passenger connectivity with key destinations, although at reduced frequencies, under the confines of the place- specific and flight-specific suspension mechanism”. This means that while passenger flights to the Chinese Mainland will remain largely unaffected, capacity to the rest of the Cathay Pacific network will see a reduction to ensure continued compliance with the latest Government measures. The airline plans to leverage the capacity provided by its low-cost subsidiary HK Express to maintain connectivity with a number of regional destinations.
