The Cathay Pacific Group will park 40 per cent of its passenger fleet overseas and says a restructuring is “inevitable” as it reported a drastic drop in its traffic numbers for the month of August due to the coronavirus pandemic.
The Hong Kong-based airline group revealed in its latest traffic figures for the month of August that it carried a total of 35,773 passengers last month, a decrease of 98.8 per cent compared to August 2019.
It operated 7.8 per cent of its normal capacity – a marginal increase from 7.1% in July.
With few signs of improvement, the group has lowered its operating flight capacity to about 10 per cent in September and October.
“Given that we will be operating just a fraction of our services in the foreseeable future, we will continue to transfer some of our passenger fleet – approximately 40 percent – to locations outside of Hong Kong in keeping with prudent operational and asset management considerations,” said chief customer and commercial officer Ronald Lam.
Lam said in the report that the airline was “facing a long and uncertain road to recovery.”
The group is burning cash at a rate of HK$1.5 billion per month, said Lam, and “will continue to experience significant cash burn until the market recovers.”
“We are weathering the storm for now, but the fact remains that we simply will not survive unless we adapt our airlines for the new travel market. A restructuring will therefore be inevitable to protect the company, the Hong Kong aviation hub, and the livelihoods of as many people as possible,” said Lam.
Lam noted that the airline saw “stronger demand” on certain routes, such as student traffic to the UK with flights recording load factors of up to 90 per cent, as well as transit flights departing from the Chinese mainland via Hong Kong in mid-August.
“Passenger demand continued to be very weak as new waves of Covid-19 in our key markets dampened overall travel sentiment. With no new destinations being resumed in August, we saw only minimal increase in passenger flight capacity compared to the previous month,” said Lam.