MIAMI – Cathay Pacific Airways (CX), Hong Kong’s flagship carrier will operate at no more than half its pre-pandemic passenger service level through 2022. Industry experts take this as a warning of gloomy prospects for a quick business recovery.
“We expect we will operate at approximately 10% of our pre-pandemic passenger flight capacity for the rest of 2020 and under 50% for overall 2021,” Ronald Lam, Cathay’s chief customer and commercial officer, said in a statement issued on Monday.
A Smaller Airline in the Future
The update comes as management finalizes a restructuring plan based on assumptions of a smaller “optimum size and shape.” Officials met with staff unions amid speculation about job and pay cuts that local media say could be unveiled as early as this week.
“This is the most optimistic scenario we can responsibly adopt today,” said Lam. “We assume we will operate well below a quarter of pre-pandemic capacity in the first half of next year. But we think we will see a recovery in the second half of the year. This assumes that the vaccines prove to be effective and are widely adopted in our key markets by summer 2021.”
Cathay has no domestic routes of its own given its geographically compact home market. The airline last month raised the share of its jet fleet parked in long-term storage outside Hong Kong to 40% from about 33% due to dim prospects in passenger traffic.
A Difficult Summer
“September rounded off an incredibly difficult summer,” Lam continued. “We continued to operate at minimal capacity: just 9%. That was a marginal month-on-month increase from about 8% in August. We relied heavily on student traffic to the UK.”
The executive added that to cater to the transit passenger demand from the Chinese mainland, CX launched three charter services from Hong Kong to London. It also launched another from Hong Kong to Tel Aviv for transit passengers from Shanghai.
According to Lam, demand from the Chinese mainland has gradually increased since the lifting of the ban in Hong Kong of ex-Chinese mainland transit travel in mid-August. Overall, transit passengers accounted for about 33% of our total traffic in September.
Featured image: Brandon Farris