Cathay Pacific Cargo Unleashed: Soaring to New Heights

Reactivation of passenger aircraft boosts cargo volumes

As a combination carrier, Cathay Pacific operates passenger and cargo jets. Shown here is a Boeing 747-400 freighter at Frankfurt International Airport on July 27, 2022 (Photo: Shutterstock/Max Walter)

Cathay Pacific Cargo's Rapid Rebound

After three years of stringent COVID health policies in Hong Kong and China, Cathay Pacific Airways is quickly regaining its status as a leading cargo carrier. Rebuilding the passenger network in response to China's revised COVID containment strategies will significantly improve the cargo division's global transportation capabilities. The reopening of the China-Hong Kong border and the relaxation of restrictions on cross-border trucking will also facilitate the flow of cargo from the manufacturing centers of southern China to Hong Kong International Airport.

Surging Cargo Figures

In February, Cathay Pacific's cargo weight increased by 59.6% compared to the previous year, when capacity was significantly reduced due to stricter crew quarantine measures. Transit time for shipments grew 2.5 times, boosting revenue. Tonnage and capacity for the first two months of 2023 increased by 43% and tripled, respectively. Tonnage also grew 9% from January, reflecting increased demand following the Lunar New Year holiday. Cathay's data aligns with industry trends, indicating a surge in cargo volumes from China to the US and Europe in recent weeks.

Optimistic Outlook

Cathay Cargo is confident in its cargo capabilities as it operates 20 Boeing 747 cargo jets and manages cargo throughput on passenger aircraft. According to reports, e-commerce demand is growing faster than general cargo demand. In 2021, Cathay Cargo ranked ninth in terms of cargo volume, down from fifth in 2019.

Pandemic Impact and Recovery

Cathay Pacific was severely impacted by the pandemic, with its passenger service nearly wiped out and operations severely constrained by stringent restrictions. A seven-day quarantine for local crews hindered passenger and cargo flights. Cathay Pacific resumed full freighter schedules in August and anticipates operating at 70% of capacity prior to the crisis by the end of the year.

First Operating Profit in Three Years

Cathay Pacific announced its first operating profit ($450 million) in three years for 2022, attributed to Hong Kong's lifted quarantine rules. However, cargo revenue decreased 16.6% year-over-year to $3.4 million, as cargo traffic and tonnage decreased by nearly 30% and 13.3%, respectively.

Expansion and Digitalization

Cathay Pacific is reintegrating aircraft that have been parked and will receive 11 new aircraft in 2023. The company introduced priority services for time-sensitive shipments and seasonal fruit and vegetable shipping products last year. Additionally, Cathay Cargo expanded its digital capabilities to improve shipment visibility, dependability, and speed.

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