Air CargoAmerican ShipperNewsTop Stories

Cathay Pacific freighter fleet overcomes ‘double hell’ of July typhoons

Fewer flights reduced cargo volumes 17%

Cathay Pacific’s freighter fleet is finally back to full capacity after a difficult first half during which the carrier was repeatedly knocked off course trying to recover from devastating COVID-related losses.

The freighter division will be ready for the annual peak-season surge this fall, and partial restoration of passenger capacity to a quarter of pre-pandemic levels will bring overall cargo capacity to 65% by year’s end, various executives said recently.

Getting to this point has not been easy.

Expectations for fully operating all 20 Boeing 747 cargo jets in July for the first time since COVID struck in 2020 were derailed by two typhoons that upended carefully synchronized schedules for crew rotations into China and required quarantines. 

Cathay Pacific’s cargo volumes decreased 4% from June. The airline carried 111,000 tons of freight in July, a 17.2% drop year over year and a 40.7% fall from 2019, the company reported Tuesday. Cargo capacity was down 16.4% and 49% versus the pre-pandemic comparison. Load factors — a measure of how full planes are — fell 10.8 points to 71%.

During 2021, the Hong Kong flag carrier was able to maintain about 70% of total pre-pandemic cargo capacity with its freighters and heavy use of repurposed passenger aircraft as auxiliary freighters. 

But Hong Kong’s ban in January of flights from nine countries, including the U.S. and U.K., and rules for seven-day crew quarantines after returning from international trips forced Cathay to significantly reduce flights, including all long-haul freighter operations. The airline gradually reintroduced freighter service during the spring, starting with regional routes followed by some long-haul destinations.  

July was supposed to be the turning point for unrestricted freighter operations.

“The typhoons threw everything upside down. It literally took us an entire month to recover our schedule,” Fred Ruggiero, vice president for cargo in the Americas, said in an interview.

Freighter crews operating internationally only need a negative COVID test upon arrival. To comply with local regulations, Cathay Pacific has dedicated crews for operations into mainland China. They function in a closed-loop system that requires isolation from other groups.

Pilots are paid by the hour and don’t make as much on short-haul flights, so Cathay Pacific each week swaps some teams to equalize their pay. Pilots switching groups must first go through a quarantine period.

“Because of the specific quarantine regulations we have, for China versus the rest of the world, we now have to pair pilots or crew to specific routes. You need more pilots to do this [and] if there’s a disruption, then all hell breaks loose. And if you have two disruptions, then you have double hell,” Ruggiero said. 

The adjustment from a single pool of pilots minimized the airlines’ ability to substitute crews when flights were canceled or delayed because of the storms.

“The good news is that we’re beyond it and operating our full schedule again,” the U.S.-based cargo executive said. “Unfortunately, one more typhoon, we’re back in a pickle.”

Relaxed COVID policies offer relief

Hong Kong’s new leader, John Lee, is loosening travel restrictions, which could reduce the risk of further disruptions for the home carrier. The quarantine period for international travelers was recently reduced to three days from seven days, and people transiting Hong Kong no longer need to quarantine.

While most airlines have restored the majority of their passenger flights this year, Cathay Pacific’s business continues to be choked by China’s zero-tolerance approach toward COVID. As of July, the airline still only flew  7% of its pre-pandemic passenger numbers. But the adjusted COVID policies are enabling the airline to finally add more passenger capacity.

Passenger flights are important because Cathay can offer customers a larger cargo network, with connecting flights at large hubs feeding the freighter fleet.

Lots of preighters

Cathay is one of the remaining passenger airlines still using a large number of passenger aircraft in dedicated cargo mode, mostly in regional operations. In July, Cathay operated more than 600 two-way passenger-freighters, or “preighters.” It still has six Boeing 777-300 jets with seats removed to allow cargo carried in the cabin, increasing payloads.

During July and August, Cathay, for example, has scheduled dozens of cargo-only flights to Bangkok; Manila, Philippines; Saigon, Vietnam; and Japan because demand within Asia remains very strong. It is operating more than 200 auxiliary freighters per month back and forth between Hong Kong and Taipei, Taiwan, according to Ruggiero.

Cargo demand remained flat in many key markets in July, traditionally a quiet period for air cargo, Cathay said Tuesday.

The combination carrier and competitors didn’t get a bump in cargo volumes following the end of lockdowns in Shanghai and other Chinese cities because factory production was so curtailed there wasn’t an expected backlog in shipments.

Cathay is still coping with some cross-border trucking issues. Drivers who take cargo between the Hong Kong hub and mainland cities in southern China are still operating in a closed loop in both directions, limiting their availability. Some freight forwarders continue to bypass the truck delays by using sea-feeder services to deliver goods to the airport for export

Cathay Pacific, which has required financial support from the Hong Kong government, last week reported a HK$4.9 billion ($638 million) loss in the first half of the year, putting the total loss over the past two years at more than $4 billion. In the first seven months of the year, tonnage was down 6% against a 28.3% drop in capacity compared to the same period last year.

First-half cargo revenue increased 9.3% to $1.6 billion as yields soared 70%.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

RECOMMENDED READING: 

Cathay Pacific freighters make comeback, but cargo volume still lags

Cathay Pacific uses boats to move cargo faster during Hong Kong’s COVID lockdowns

5 Comments

  1. Makes 💵$340 to 💵$680 per daydf online work and I received 💵$21894 in one month online acting from home. I am a daily student and work simply one to a pair of hours in my spare time. Everybody will do that job and online ask extra cash by simply
    copy and open this site .…………> 𝐰𝐰𝐰.𝐬𝐚𝐥𝐚𝐫𝐲𝐛𝐚𝐚𝐫.𝐜𝐨𝐦

  2. I’ve made 💰$64,000💰 so far this year working online and I’m a full time student. Im using an online business opportunity I heard about and I’ve made such great money. It’s really user friendly and I’m just so happy that I found out about it. Heres what I do.
    🙂 AND GOOD LUCK.:)

    HERE====)> 𝐰𝐰𝐰.𝐖𝐨𝐫𝐤𝐬𝐟𝐮𝐥.𝐜𝐨𝐦

  3. =❤️= [ JOIN US ]
    I get paid more than 💰$100 to 💰$700 per HOUR for working online. I heard about this job 3 months ago and after joining this I have earned easily 💰$35000 from this…A. without having online working skills .. Simply give it a shot on the accompanying site…

    COPY AND OPEN NOW………>>> 𝐰𝐰𝐰.𝐰𝐨𝐫𝐤𝐬𝐜𝐥𝐢𝐜𝐤.𝐜𝐨𝐦

  4. Earn income while simply working online. work from home whenever you want. just for maximum 2 hours a day you can make more than Plmj $500 per day online. from this i made $17632 last month in my spare time.

    Check info here—–>>> 𝐖𝐰𝐰.𝐉𝐨𝐛𝐬𝐑𝐞𝐯𝐞𝐧𝐮𝐞.𝐜𝐨𝐦

  5. [ JOIN US ]

    I am making 💵$92/hour telecommuting. I never imagined that it was honest to goodness yet my closest companion is earning 💵 $21 thousand a month by working on the web, that was truly shocking for me, she prescribed me to attempt it. simply give it a shot on the
    copy and open this site .…………>>𝐖­­𝐰­­𝐰­­.𝐖­­𝐨­­𝐫­­𝐤­­𝐒­­𝐢­­𝐭­­𝐞­­𝟐­­𝟒.𝐂­­𝐨­­𝐦

Leave a Reply

Your email address will not be published.

Eric Kulisch

Eric is the Supply Chain and Air Cargo Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals from the American Society of Business Publication Editors for government coverage and news analysis, and was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. Eric is based in Portland, Oregon. He can be reached for comments and tips at ekulisch@freightwaves.com