Strong year for Cathay as cargo tonnage outstrips capacity growth

Strong year for Cathay as cargo tonnage outstrips capacity growth

HONG KONG — Cathay Pacific and its sister airline Dragonair carried 1.72 million tons of cargo during 2014, a 12 percent increase over the previous year as the strong second half performance continued into December.

The all-important supply-demand balance was strongly weighted in the airlines’ favor, with capacity growing 10.4 percent in 2014 and revenue per freight mile flown rising almost 15 percent compared to the previous year.

“Following on from a strong November, demand for cargo shipments remained robust right up until the beginning of the Christmas holidays in key markets,” said Mark Sutch, Cathay Pacific general manager cargo sales and marketing. 

“Traffic was again driven by strong demand out of Hong Kong and mainland China, particularly on trans-Pacific routes, and we also saw solid shipments on the main intra-Asia lanes.”

The two airlines carried 156,603 tons of cargo and mail last month, an increase of 12.2 percent compared to December the previous year. Cargo and mail load factors rose by 4.9 percent to 68.2 percent.

Such said demand fell away when the holidays kicked in, but the markets have begun to pick up as shippers start to send out the pre-Chinese New Year (CNY) cargo.

Asia forwarders are preparing for a busy first quarter with a six-week sweet spot between the western year end and a late CNY expected to drive up cargo volumes being shipped out before the mainland's most important holiday.

The official CNY falls on Feb. 19, which is later than usual and typically leads to a three-week factory shutdown that shippers the U.S. and Europe need to beat if they are to make the Spring sales.

Cathay Pacific’s strong 2014 numbers come close on the heels of record annual throughput at Shanghai Pudong International Airport Cargo Terminal Co., Ltd. (Pactl), and strong growth at Hong Kong Air Cargo Terminals Ltd. (Hactl).

Pact saw its tonnage grow 16.15 percent year-over-year, reaching a total figure of 1,502,113 tons of freight in 2014. It was the strongest annual result in the company’s history.

Domestic cargo volume grew by 6.25 percent compared to 2013, hitting 97,336 tonnes, while international cargo volumes rose by 16.91 percent to 1.4 tons. Imports increased by 16.85 percent to 597,956 tonnes, while exports showed growth of 15.69 percent and reached a total figure of 904,157 tonnes in 2014 year-over-year.

 “We were not only able to meet, but even exceed our positive expectations at the end of the year,” said Lutz Grzegorz, vice president of Pactl. 

“We particularly welcome the significant growth rates for imports, as they indicate an increasing balance in the flows of commodities and will therefore help our customers to make their transport cycles more efficient. We’re not anticipating any decline in figures at the moment and therefore expect developments to continue at a similarly high level in 2015,” he said.

Hactl chief executive Mark Whitehead said the airport’s largest air freight terminal saw throughput growth of 8.7 percent year-over-year as a strong fourth quarter performance was helped by U.S. West Coast port congestion and the temporary shift of cargo from sea to air. New records were set on daily, weekly and monthly tonnage during November.

“It is anticipated transshipment will continue to grow on the back of intra-Asia trade and further support the status of Hong Kong International Airport as the world’s busiest air cargo hub,” Whitehead said.

Contact Greg Knowler at gknowler@joc.com and follow him on Twitter: @greg_knowler.