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Cathay Pacific Cargo predicts muted peak season

Cathay Pacific Cargo is expecting a muted peak season while it continues to add passenger flights and faces cross-border trucking issues.

Updating on current market conditions, Cathay Pacific head of cargo sales for Hong Kong and the Greater Bay Area (GBA) Frank Yau said that demand out of Shanghai was expected to continue to pick up in the second half of the year as the city continues to lift lockdown restrictions.

However, inflationary pressures are expected to have a negative impact on the peak season.

“Shanghai is now operating a normal volume of flights and we anticipate some of the growth lost in the first half of the year will move across into the second as the supply chain stabilises,” said Yau.

“We are anticipating that this will contribute to a busy winter season this year, but it may not be as pronounced as last year, in part due to some economic uncertainty from higher energy prices and inflationary forces that are starting to dent consumer confidence.”

Yau added that the lifting of restrictions in Hong Kong and an increase in passenger services means the carrier is hoping that cargo capacity could reach 65% of pre-pandemic levels by the end of the year.

The airline will also continue to operate cargo-only passenger flights to support cargo operations, he said.

However, the carrier has faced some challenges when it comes to expanding cargo operations.

“Our reactivated full freighter schedule was subject to some operational issues in July, in combination with a number of different regulatory requirements with which we have to comply,” said Yau.

“That put some pressure on our crew resources leading to limited cancellations as we have to roster dedicated crews to the Chinese Mainland, and this prevents us redeploying crewing resources from elsewhere. We will restore resources from August onwards and be ready for the seasonal upturn.”

The company is also facing cross-border trucking issues.

“The situation is fluid but the drivers who take cargo between our home hub and the Chinese Mainland, and the wider GBA in particular, are still operating in a closed loop in both directions,” he said.

“Agents are continuing to bring in some cargo from other cities in the GBA to our hub by sea.”

“The GBA is, and will continue to be, a hugely important market for us. That is why we have invested resources in and expanded our GBA Cargo Sales Team.

“With more than 86m people, the GBA’s population is 10 times that of Hong Kong alone and makes up 12-13% of the Chinese Mainland’s GDP.”

Credit Air Cargo News by Damian Brett

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