Cathay Pacific And Hong Kong Are Falling Behind In Asian Recovery

Not long ago, Cathay Pacific and Hong Kong International Airport were edging toward the number one spot in Asia, vying with Singapore Airlines and Singapore Changi Airport to be the region’s leading airline and international hub.

A new environment

A lot has changed in Hong Kong following the student riots and severe COVID-19 travel lockdowns, and while both the airline and the airport remain high-quality operators, they are falling behind the rest of Asia in the post-pandemic recovery.

Now that travel restrictions are a thing of the past, Cathay Pacific and its low-cost airline, HK Express, are returning, adding new routes and destinations and resuming old favorites that were profitable before the pandemic. It has added capacity back in a disciplined and methodical way, ensuring acceptable passenger loads by aligning demand and capacity.

Photo: Vincenzo Pace | Simple Flying

Measured against itself, Cathay Pacific (Cathay) is performing well, but in terms of recovery, it is not keeping pace with the leading Asian airlines, such as Singapore Airlines, AirAsia, Air India, Scoot and Vietjet.

On Thursday, Cathay released its June traffic figures, which showed that in the first six months of this year, Cathay and HK Express carried 13.5 million passengers, a 73% recovery compared to the 18.3 million passengers Cathay and Cathay Dragon carried in the same period in 2019.

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Airlines report traffic differently, so comparisons are not always readily available. Still, in May, the Singapore Airlines Group, which includes Singapore Airlines and Scoot, carried 106% of the passengers they carried in May 2019.

Adding more capacity

In June, Cathay Pacific carried 1.84 million passengers, an increase of 18.7% compared to June 2023, so it is speeding up the recovery, but that is not expected to be complete until the first quarter of next year.

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Chief Customer and Commercial Officer Lavinia Lau said that after a quieter month in May, travel sentiment rebounded in June, with leisure travel on both long-haul and short-haul routes performing well. Short-haul travel was boosted in June by the Dragon Boat Festival and Hong Kong SAR Establishment Day long holiday weekends, which drove strong demand from the home market and Japan. Lau added:

“Demand for long-haul travel was driven by the peak season for returning student traffic, and load factors for the United States, Canada, United Kingdom and Europe were each close to 90%. The resumption of our summer seasonal Barcelona service was also popular with customers, particularly those originating from Hong Kong, Spain and Australia.”

Photo: Suparat Chairatprasert | Shutterstock

In June, Cathay increased passenger revenue kilometers by 23.7%, but that was outgrown by the 30% increase in available seat kilometers year-on-year (YoY), pushing the passenger load factor down by 4.2 percentage points to 83.5%. Compared to the first half of 2023, demand (RPKs) increased by 34.9%, and capacity (ASKs) by 42.7% as the airline resumed more services and added new routes. Those changes saw the load factor fall to 82.4% from 87.2% in the first half of 2023.

The Cathay Pacific Group has announced ten new destinations this year, seven of which have commenced operations. In August, it is adding a four-times-weekly service from Hong Kong International Airport (HKG) to Ningbo in Mainland China and a seasonal three-times-weekly service to Cairns (Australia) between December 2024 and March 2025.