Cathay Pacific’s cargo revenue in 2015 fell 9 per cent compared to the previous year due to falling fuel surcharges that were forced down by lower fuel prices, the Hong Kong-based carrier said while announcing its annual results this week.
Strong competition, overcapacity, unfavourable foreign currency movements also put pressure on yields, which decreased by 13.2 per cent, the company said.
Demand was strong in the first quarter of 2015, assisted by industrial action at ports on the US West Coast. Overall demand was weak for the rest of the year, particularly on the heavily traded routes to Europe, which hit the carrier’s yield, it said in a statement.
Cathay Pacific chairman John Slosar said the operating environment was better in 2015 than in 2014, but the carrier faced significant challenges that would continue in 2016. “Cargo demand will be adversely affected by industry overcapacity,” he said.
Strong demand was reported on Cathay's Asian routes and across the Pacific to the US, the carrier said. Two freighter services per week were added to North America in April and routings were adjusted to increase cargo capacity on the Chicago, Los Angeles and New York routes.
The frequency of the Columbus service was increased from three to four flights a week from October last year.
There was growth in shipments of perishable goods from Vietnam, as well as solid demand for cargo to India, particularly for infrastructure projects.
Cathay Pacific also introduced a freighter service to Kolkata in March and increased the frequency of its Delhi service from seven to eight flights a week in the same month.
There was solid growth in demand for shipments of cargo from Bangladesh, and demand for shipments of milk powder to mainland China, fresh products to Asia and chilled meat to the Middle East from the Southwest Pacific was strong.
Last year was also the second full year of operations for the Cathay Pacific cargo terminal at Hong Kong International Airport. The terminal handled 1.7m tonnes of cargo in 2015, an increase of 13 per cent compared to 2014. It serves 12 airlines, including Cathay Pacific, Dragonair and Air Hong Kong.