Many Cathay Pacific aircraft are unlikely to enter service again.
Cathay Pacific has reported that the first six months of 2020 have been the most challenging that the group has faced in its 70-year history.
Despite a promising start in January with signs of a rise in passenger demand following the anti-government protests in 2019, the impact of the coronavirus pandemic has been unprecedented.
In a statement issued by Cathay Pacific this week, group chairman Patrick Healy admitted that the global health crisis has decimated the travel industry and that the future remains “highly uncertain”.
“Most analysis (is) suggesting that it will take years to recover to pre-crisis levels,” he said.
Passenger revenue decreased by more than 72% in the first half of 2020. Losses included HK$2,465 million in costs for 16 aircraft that are unlikely to re-enter economic service again before they are retired.
“This loss of revenue reflects the precipitous drop in passenger demand resulting from the extensive travel restrictions, border controls and quarantine arrangements which were implemented around the world,” said Healy.
In April and May the airline was carrying an average of only 500 passengers a day, 76% fewer than in 2019.
According to Healy, most industry analysts are forecasting very gradual recoveries over a protracted period. The International Air Transport Association predicts that it will not be until 2024 at the earliest before international passenger demand returns to pre-crisis levels. A looming global recession and intensifying geopolitical tensions will further impact the demand for air travel.
“This is the biggest challenge to the aviation industry that Cathay Pacific has ever witnessed,” said Healy. “We do not expect to see a meaningful recovery in our passenger business for some time to come.”
The airline will continue to monitor market demand as it works towards reintroducing flights “as appropriate”.
In more positive news, Hong Kong International Airport has announced that passengers from mainland China will be able to transit through Hong Kong to other destinations from August 15 until October 15. It’s hoped this will boost passenger numbers for Cathay Pacific, which is the airport's dominant carrier.
However, transit for inbound passengers to mainland China will remain banned.