The Cathay Pacific Group reported a net loss of US$262 million in the first half of 2017, down from a profit of $45 million in 1H16, as the carrier’s passenger business struggled in the face of increasing competition from airlines based in mainland China. On the cargo side, however, there was nothing but good news. Cargo traffic in the half was up 9%, and revenue grew even more strongly, up by almost 12%.
In addition to the numbers (which are in the chart above), Cathay provided considerable detail on its cargo business. Below, we quote extensively from the company’s comments, because, in addition to what they show about Cathay, we feel they provide considerable insight into the overall state of the air cargo business in what is clearly the best year for the industry in a long time:
- Yield benefited from the resumption (from April) of fuel surcharges and from strong demand for Mainland China exports.
- In February 2017, Cathay Pacific’s joint business agreement with Lufthansa Cargo AG came into effect on cargo routes from Hong Kong to Europe. It will come into effect on routes from Europe to Hong Kong in the third quarter of 2018.
- In June 2017, we wet-leased two Atlas Air Worldwide Boeing 747-8F freighters. This enabled us to increase the frequencies of our Atlanta, Chicago, Miami and Amsterdam cargo services and to increase capacity on our Mexico cargo service.
- Cargo exports from Mainland China were very strong during the first six months of 2017, particularly on trans-Pacific routes.
- Demand for shipments of perishable goods to Mainland China increased.
- Demand for shipments to and from the Indian sub-continent was strong during the period.
- Demand for shipments within Asia was stronger in the first half of 2017 than in the first half of 2016.
- Our European routes did better. Increased shipments of pharmaceutical products benefited yield.
- Our two-times-weekly service to Portland, which was introduced in November 2016, will become a three-times-weekly service in September 2017, reflecting strong demand.
- Shipments to and from South America grew strongly, assisted by interline arrangements with LATAM Airlines Group, Amerijet International and Atlas Air Worldwide.
Join us at the Cargo Facts Symposium in Miami, 2 – 4 October, to hear thoughts about the future from senior air freight executives from all regions, and all types of carriers. To register, or for more information, go to CargoFactsSymposium.com. As a reminder, the “early bird” registration rate ends today, 18 August.