Cathay Pacific Cargo revenue dropped 16.6% in 2022

China-based Cathay Pacific Cargo saw revenues fall 16.6% year over year as COVID-19 restrictions kept the carrier from resuming key routes early in 2022, according to its full-year 2022 results. WHY IT MATTERS: The carrier described 2022 as a “challenging” year, according to a March 8 earnings report. Due to COVID travel restrictions and quarantine requirements for both travelers and Hong Kong-based aircrew, cargo operations remained restrained until restrictions began lifting on May 1, 2022. THE BIG PICTURE: The carrier resumed operating a full freighter schedule in August 2022, the report stated. The carrier also resumed most passenger services gradually between October and December, which led to the increased bellyhold capacity contributing to a gradual uptick in overall capacity. However, this did not prevent capacity from declining YoY. BY THE NUMBERS: Cargo revenue in 2022 dropped 16.6% YoY to HK$26.9 billion (US $3.44 billion) from $4.12 billion in 2021 , according to the report. Passenger service revenue, meanwhile, saw a massive 214.9% YoY spike to $1.74 billion in 2022 from $550 million in 2021. Capacity decreased by 19.0% to 8.2 billion available cargo tonne kilometers; Traffic decreased by 29.8% to 5.7 billion cargo revenue tonne kilometers; Total tonnage in 2022 fell by 13.4% to 1.15 million tonnes; Load factor in 2022 fell to 70.6% compared with 81.4% in 2021; and Yield increased by 18.5% YoY to 59 cents. WHAT THEY’RE SAYING: Cathay Pacific Chair Patrick Healy called 2022 “a year of two halves” in a March 8 media briefing. “The first half saw us operating under some of the strictest travel and operating restrictions in the world at any point of the pandemic,” Healy told reporters. “However, progressive adjustments to these restrictions, particularly in the second half of the year, enabled us to gradually add back more capacity. This resulted in us being operating cash generative in the second half, and indeed for 2022 as a whole.” NOTEWORTHY: 2022 saw Cathay Pacific Cargo launch several initiatives, partnerships and routes to jumpstart operations: In May, Cathay partnered Lufthansa and Swiss WorldCargo with Hong Kong (HKG) and Zurich (ZRH) and Frankfurt (FRA), jointly operating network planning, sales, information technology (IT) and ground handling; In August, the carrier adopted two milestones from Cargo iQ to improve visibility between the carrier’s warehouse and ramp handling operations. The initiatives, “Freight out of Warehouse control” (FOW) and “Freight into Warehouse control” (FIW), are intended to streamline the cargo shipment journey and optimize operations for ground handling performance; In September, the carrier launched an in-house chatbot for faster response times for customers’ cargo queries; Cathay also launched a priority service in May that provides time-sensitive shipments for customers; and In November, the carrier consolidated its solution for pharmaceutical shipments under the new name Cathay Pharma to streamline pharma operations and increase its focus on cool-chain solutions. BOTTOM LINE: Cathay’s resumption in passenger services as well as a resurgence in cargo operations later in 2022 made up for early year losses in cargo, the report stated. By the end of 2022, the carrier operated two-thirds of pre-pandemic cargo flight capacity levels for both passenger and cargo services, with more resumed routes on the horizon for 2023.

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