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Cathay Pacific Airways expects a significant drop in its H1 2020 results and has also cut capacity due to the coronavirus fears. Severe travel restrictions as a result of the virus outbreak have led to a rise in flight cancellations.
Cathay Pacific Airways said on Monday it is expecting a critical fall of its first-half results because of the epidemic of the coronavirus.
The airline stated it cut capacity by 40% for February and March. Moreover, the figures for April will be reduced as well. In January, Cathay Pacific and Cathay Dragon carried a total of 3,010,012 passengers that represents a 3.8% fall compared to the same month last year. The two airlines carried 151,964 tonnes of cargo and mail last month, which also proves a fall of 8.9% compared to the last January.
Travel Demand Drops Substantially amid Coronavirus
The cargo and mail load factor declined by 1.4 percentage points to 60.2%. Capacity, measured in available freight tonne kilometres (AFTKs), was down by 3.2% while cargo and mail revenue freight tonne kilometers (RFTKs) decreased by 5.4%.
Cathay Pacific Group Chief Customer and Commercial Officer Ronald Lam said:
“This was the most challenging Chinese New Year period we have experienced. As the novel coronavirus outbreak in mainland China intensified towards the end of the holiday period, travel demand dropped substantially. With more governments worldwide having imposed travel restrictions on passengers from mainland China and in some cases Hong Kong, we are seeing continued cancellations of bookings.”
Lam added that the company took a series of short-term measures in response. This included a big reduction of capacity across their global network.
The overall passenger performance in January was behind 2019 results as well. Inbound passenger traffic to Hong Kong was down 40% year-on-year, a small improvement over the 46% declines seen in November and December. For the first time in the past few months the company saw growth in its outbound traffic, by 1%, even though this was largely due to the Chinese New Year holiday starting earlier this year. From the company, they say they are still heavily reliant on lower-yield transit traffic through Hong Kong, which grew by 7% versus the same period last year.
Significant Cancellation of Cathay Pacific Bookings Due to Coronavirus
For now, the company started off 2020 fairly positively, seeing satisfactory passenger traffic volume through the first three weeks of the year. This was particularly evident with the long haul routes, which showed improved load factors and yield over 2019. However, Cathay’s performance deteriorated rapidly in the last week of January as the novel coronavirus situation became more severe. And still, it continues to weaken significantly. The significant cancellation of bookings within a short period of time can be observed these days,