In its customer update today, Cathay Pacific Cargo sought to assuage frayed nerves in the industry after what has been a tumultuous month for the carrier and also pointed to possible signs of a peak season.
Although with no direct reference to the Hong Kong protests including the impact on the airport, Cathay apologised to customers for disruptions caused by the protests which brought Hong Kong International Airport (HKG) to a standstill for two days in August.
Nelson Chin, GM Cargo Commercial at Cathay Cargo says: “This has been one of the most challenging periods that the Group has faced, and I would like to express my heartfelt thanks not only to our staff who remain committed to delivering our exceptional service, but to you, our customers and partners for your support and patience.”
While the airport closure had virtually no impact on maindeck flights which continued during the airport siege, belly cargo was directly impacted. August numbers bared the reality of both the US-China trade war and Hong Kong Airport disruptions with a 14 per cent decline in cargo volumes (more details here).
“We have seen the market soften worldwide, but there were some highlights in the past month, including an uptick in tonnages from South Asia, and some ad-hoc charters. We will keep a close eye on the situation, matching our capacity with demand while looking for opportunities that our fleet and network can give us,” Chin adds.
Chin also highlighted a positive development going forward, saying that while ongoing geopolitical tensions continued to affect overall market sentiment, “it is pleasing that the outlook from mid-September is more positive, with demand progressively set to improve, driven by project shipments and the restocking of inventory.”
Should these early indications prove a reality, it will surely help moderate the tumult Cathay has experienced, caught up as it was in the cross-fire of the Hong Kong democracy protests. Cathay Pacific – heavily reliant on the China market and vulnerable to Chinese central government influence – saw two of its senior executives resign in the span of a month.
Cathay CEO Rupert Hogg and Cathay chairman John Slosar both resigned in August and early September, respectively, a situation widely interpreted as a result of retributive action by the Chinese central government. Beijing has expressed its utter unhappiness over what it saw as tacit support by the airline for staff who participated in protests in their off-duty hours.
But again on the positive front, Cathay says the perishables business has been productive with the year to date to June, growing globally by 3.4 per cent, and Cathay’s own Fresh LIFT product has grown by 1.3 per cent against an overall global drop in air freight.
“Asia is a growing perishables market, led by Mainland China, India, Japan and Southeast Asia, in line with the economic development taking place in this part of the world,” says China. “We are within five hours of half the world’s population, making Hong Kong an ideal transhipment hub.”
Chin adds: “Cathay Pacific remains very much committed to the perishables market, and we will continue to invest in solutions that best serve our customers. We launched our Fresh LIFT product in 2007, and we have product champions around the world, especially in Hong Kong.”
And echoing Cathay Pacific Group chief customer and commercial officer Ronald Lam’s comments, Chin says the carrier remains committed to running a “reliable operation with safety as our top priority and to fulfilling our ambition to become the most customer-centric air cargo service provider globally.” Safety was the backstory cited for Hogg’s resignation, one first tapped by China’s regulatory authority as apparent justification for directives to the Hong Kong carrier.
“Our commitment to invest in products and services continues and we look forward to supporting you better, particularly as we face headwinds in global trade.”