LONDON – Cathay Pacific (CX) will place 40% of its fleet in long-term storage. These aircraft will be flown overseas. In CX’s monthly traffic results for August 2020, the airline commented on this move.
“[We] will be operating just a fraction of our services in the foreseeable future. [This move is a] prudent asset-management decision that is necessary to ensure that the condition and value of our aircraft are maintained while they are not flying.”
Delivery Deferrals on the Way
The carrier has stated that it is in talks with Airbus and Boeing over the deferral of deliveries over the next few years. In July, the airline agreed on deferrals on Airbus A350 and A321neo aircraft by an additional two years.
Cathay Pacific is also in “advanced negotiations” with Boeing for the deferral of the 21 Boeing 777-9Xs it has on order as well. This move comes as no surprise given the choice to place aircraft in long-term overseas storage.
The Group, which includes Cathay Dragon (KA) has only handled 35,773 passengers for August 2020, which is a 98.8% drop compared to the same period last year.
The passenger load factor at the airline has fallen below 20% for the first time this year, representing a 60% drop compared to August 2019. In turn, Available Seat Kilometres (ASK), which measures capacity, dropped by 92% for August.
The airline also recorded a loss of US$1.12bn for the six months ending June 30 due to the continued effects of the COVID-19 pandemic.
Commenting on this news was Ronald Lam, the Cathay Group Chief Commercial and Customer Officer, who expressed more visually the numbers. “With no new destinations being resumed in August, we saw only a minimal increase in passenger flight capacity compared to the previous month.”
“We operated just 7.8% of our normal capacity – a marginal increase from 7.1% in July – however, our overall passenger volume was down month on month and our load factor dipped below 20%.”
A Struggle Ahead
It remains clear that Cathay Pacific is not out of the woods just yet. With industry analysts stating that recovery will not take place until 2024 at the earliest, the airline is evidently taking the necessary measures to cope with that.
It will certainly be interesting to see which aircraft in particular will be sent overseas for such storage, as well as the locations the aircraft will be placed.
For now, CX has one focus and one focus only. Survival.
Featured Image: Cathay Pacific Airbus A330. Photo Credit: Wikimedia Commons