Cathay Pacific is reportedly in discussions with Boeing and Airbus for a potential order of up to six next-generation freighters to expand and replenish its fleet of 20,747 freighters, as well as telegraph. or in other years.

Cathay Pacific is considering new Boeing 777-8 and Airbus A350 freighters, sources told Bloomberg News last week. Retrofits of existing Boeing 777 passenger jets are also under consideration, but Cathay has traditionally favored newer models.

Hong Kong Airlines currently operates six Boeing 747-400 freighters with an average age of 13.8 years and 14 Boeing 747-8s with an average age of 9.7 years, according to airline data provider ch-aviation.

Cathay Pacific’s large passenger fleet includes 44 A350 aircraft, on which the new cargo variant is based.

Despite the severe fallout from Hong Kong and China’s restrictive policies over the COVID-19 crisis, which grounded most of its passenger fleet for more than two years and grounded its cargo ships for extended periods, Cathay Pacific remains one from the main cargo ships. airlines in the world. However, the pandemic took its toll. According to the International Air Transport Association, Cathay dropped from the fifth-largest carrier by volume in 2020 to the ninth.

Trucking has been a lifeline for Cathay, accounting for nearly 80% of Cathay Group’s total revenue in 2021.

Milder peak season

However, weak summer demand continued in August, with cargo volumes down 23.3% year-on-year and 35% year-on-year, according to the latest airline data. Mass quarantines and heat waves in China’s major cities that interrupted the flow of raw materials and components to factories, prolonged periods of labor shortages, hampered production in China and the volume of exports transported by Cathay Pacific.

The freight outlook, on the one hand, is improving as Hong Kong finally opens to travel and China lifts more municipal COVID lockdowns. But China’s ongoing manufacturing woes and darkening economic clouds related to inflation are holding back demand for freight worldwide.

There will be no repeat of last year’s record peak season, but “we hope that local restrictions in mainland China will begin to ease, leading to increased industrial production to meet traditional end-of-year demand and thus a shorter but solid peak season,” – said George Edmunds, general manager of commercial cargo sales, on Friday in the carrier’s advanced monthly newsletter.

Demand is likely to pick up after China’s national holiday, which runs from October 1 to 7, Edmunds added. During Golden Week, most factories in China are closed, and sea and air carriers reduce service levels.

Two weeks ago, FedEx Express shocked the markets when it said that the global economic slowdown was reflected in a sharp decline in volumes, forcing it to cut back on trans-Pacific and other flights.

Cathay Pacific they started warning a month ago that the traditionally busy air travel season will be muted this year due to the high cost of living forcing people to focus spending on essentials and constant supply chain disruptions.

This year, Cathay Pacific Cargo has vacillated between resuming its full cargo network and cutting back. It grounded most cargo planes at the start of the year to comply with Hong Kong’s rules for returning pilots to a seven-day quarantine. After gradually restoring service over several months, the typhoons temporarily disrupted Cathay’s carefully synchronized crew rotation for flights to China.

More stomach capacity

Cargo ship operations are back to full capacity and will soon be complemented by increased passenger capacity. The company is starting to ramp up passenger flights after Hong Kong lifted a three-day hotel quarantine requirement for crews of returning passengers last month and lifted quarantine for arriving passengers.

In response to the easing of travel restrictions, which is expected to spur interest in travel, Cathay Pacific said it intends to add more than 200 pairs of passenger flights in October for regional and long-haul routes. It will also increase the number of flights to Tokyo, Sapporo and Osaka later this year after the Japanese government lifted its COVID requirements for arriving visitors.

Management predicts it will be able to operate about one-third of its pre-pandemic passenger flight capacity by the end of the year, up from about 10% in August. Adding new flights will take time, as many pilots must be retrained, and parked aircraft need extensive checks and adjustments before they can be reactivated.

“This will strengthen the consistency of our operations and allow us to be more flexible for our customers,” Edmunds wrote. “We’ve also looked at lessons from other places about opening up too quickly without the resources available, and we expect to be able to provide more capacity and network choice without affecting consistency.”

The additional passenger flights will bring Cathay Pacific to about two-thirds of its total capacity in 2019 by the end of December, compared with about 59% in the summer.

Cargo capacity in August was 11% lower than last year because the airline no longer operates as many long-haul passenger flights with cargo only, Ronald Lam, chief customer and commercial officer, said in a statement released alongside the traffic data.

“Looking ahead next year, we expect capacity outside of Asia to remain constrained, possibly until Q2 or later due to ongoing restrictions on passenger traffic in Mainland China,” Lam said. “But as production and demand normalize, we expect the market to be relatively well balanced. This will be below the level we have seen over the past 18 months, but it is worth noting that it will still be well above historical averages.”

Edmunds said sea ​​freight feeder services from Mainland Logistics Park in Dongguan to Hong Kong International Airport will begin in full at the end of October, when pre-cleared pallets bypass customs and go directly to the aircraft for loading. The system, which was previously due to be fully operational in September, was implemented to circumvent the COVID-related restrictions on cargo traffic between mainland China and Hong Kong.

The current slowdown in trade has not dampened forecasts for sustained growth in air cargo over the coming years, so Cathay Pacific and other carriers continue to invest in fleet upgrades.

Click here for more FreightWaves/American Shipper stories by Eric Kulish.

RECOMMENDED READING:

Cathay Pacific predicts a weak peak in cargo traffic amid falling manufacturing in China

Cathay Pacific is using boats to move cargo faster during Hong Kong’s COVID-lockdown

The TOP 500 FREIGHTWAVES The list of hired carriers includes FedEx (No. 1).

https://www.freightwaves.com/news/cathay-pacific-lowers-cargo-expectations-for-holiday-shipping-season

Previous articleThis Program is Blazing a Trail for Women in Wildland Firefighting
Next articleThese fake US government job ads are spreading more malware