Cathay’s summer disappoints

Picture courtesy Boeing

Cathay Pacific Airways; performance thus far may well be a reflection of the current state of the global aviation business. It has seen a disappointing first half and experienced “a summer peak that didn’t live up to expectations” as reported in the airline’s house paper, CX World (September 2012).

Although forward booking for the coming months looks “reasonable” according to General Manager Revenue Management James Tong, the front end is still lagging behind capacity growth. For Cathay, passenger traffic usually begins to pick up from September and peaks in October. The overall factor has dropped below the same summer period in 2011.

Mr Tong said: “The main area of concern for our premium business remains key corporate destinations such as London, New York, Beijing and Shanghai, where we are seeing the total market size shrinking.”

The most noticeable drop is seen in the front-end cabin on short-haul routes, which testifies to the intense regional competition. But there is as much concern about the long-haul, where a number of key routes will experience capacity reduction driven mainly by the planned retirement of the airline’s B547-400 fleet.

Meanwhile, Cathay’s arch rival, Singapore Airlines (SIA), reported improved passenger traffic of 6.5 per cent in August year-on-year. Its passenger load factor for the month was 78.3 per cent, an increase of 1,7 percentage points. This was reportedly due to strong summer demand – in contrast to Cathay’s disappointment – but East Asia and Southwest Pacific registered falling demand exceeded by increased capacity – which is in line with Cathay’s regional experience.

It looks like airlines will just have to bide their time as there   are no clear indications on the horizon that the good times are at the door. “Uncertain” – used ad nauseam – continues to the most apt adjective for now to describe the future.

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About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

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