The airline, the fifth-largest freight carrier in the world, will park two 747- 400 converted freighters for a year and delay construction of its cargo terminal at the Hong Kong International Airport for up to two years.
Cathay, like its counterparts across the air cargo industry, has seen its freight business slide as an economic downturn has spread around the world and hit Asia air trade particularly hard. Cathay saw its freight traffic fall 6.7 per cent in October, sharply ahead of a 2.6 per cent pullback in capacity, compared to the same period last year.
The amount of cargo and mail carried in October dropped by 7.4 per cent to 144,466 tonnes, while the month’s capacity, measured in available cargo/ mail tonne kilometres, fell by 2.6 per cent compared to the same month in 2007. The cargo and mail load factor dropped by 2.9 percentage points to 65.9 per cent. For the year to date, cargo and mail tonnage has climbed by 2.4 per cent compared to a capacity rise of 2.8 per cent.
Cathay Pacific GM cargo sales & marketing Titus Diu said: “Usually we see a surge in our cargo business in October but this year demand was weaker than expected in most of our key markets, including Hong Kong. We saw no significant post-Olympics pick-up out of China while the mini-peak anticipated after the National Day holidays in the Mainland didn’t materialise. We worked to offset weakening demand by combining freighter flights or making ad hoc cancellations where possible.”
“The financial crisis is having a particularly severe impact on Cathay Pacific’s airfreight business as several of the world’s major economies head into recession,” Cathay said. Cathay CEO Tony Tyler said the airline “cannot see light at the end of the tunnel at this point.”
The airline will park the two freighters at a facility in Victorville, Calif., and cut back services across its network. Cathay is still taking four new 747-400 freighters from Boeing next year, however.
Cathay is also cutting its planned growth in passenger capacity from an early 6 to 7 per cent down to less than 1 per cent and is offering workers voluntary unpaid leave of up to 12 months.