The Cathay Pacific Group has warned its financial results for the first half of 2020 will be “significantly down” on the 2019 report as a result of a drop in demand in the wake of the coronavirus outbreak.
The group’s airlines carried a total of 3,010,012 passengers in January – a decrease of 3.8 per cent compared to the same month last year. Load factor also dipped 1.3 percentage points to 84.7 per cent, while capacity was reduced by 0.3 per cent.
However, chief customer and commercial officer Ronald Lam warned the Cathay Pacific Group will continue to face challenges in the first half of the year, with overall capacity for February and March reduced by around 40 per cent. He said it is also likely there will be cuts made into April as the coronavirus continues to spread.
Lam added: “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.”
Despite the outbreak affecting demand by the end of January, passenger traffic to Hong Kong in the month as a whole was down 40 per cent year-on-year compared to the 46 per cent drop seen in November and December 2019 that were likely a result of political unrest in the area.
Lam continued: “We started off 2020 fairly positively, seeing satisfactory passenger traffic volume through the first three weeks of the year. This was particularly evident with our long-haul routes, which showed improved load factors and yield over 2019. However, our performance deteriorated rapidly in the last week of January as the novel coronavirus situation became more severe, and it continues to weaken significantly. We saw significant cancellation of bookings within a short period of time.”
Looking ahead, Lam said the first half of 2020 had already been expected to be a challenging period financially, but with the added pressure of the coronavirus outbreak, results are now predicted to be “significantly down on the same period last year”.
He added: “We have an incredible brand with a reputation and track record of premium service and commitment to our customers that differentiates us from our competitors. These qualities and values remain at the heart of everything we do and are what will help us come back stronger when we emerge from this current crisis.”
There are now more than 73,000 confirmed worldwide cases of the novel coronavirus, now named Covid-19 by the World Health Organisation, with more than 1,800 deaths, mostly in mainland China.
cathaypacific.com