Dive Brief:
- Cathay Pacific is making "substantial reductions" to its long-haul cargo capacity through March after Hong Kong tightened COVID-19 quarantine measures for airline crew, the company announced last week.
- Hong Kong-based air cargo crew members are now subject to seven days of hotel quarantine instead of three days, the government announced Dec. 31, 2021. The day before, Cathay had announced all long-haul freighter and cargo-only passenger flights would be suspended until Jan. 6 due to more stringent quarantine requirements.
- Cathay Pacific's cargo capacity is expected to drop from 70% of its pre-pandemic levels to around 20%, according to the South China Morning Post, citing an internal company memo. The airline said it is "exploring alternative operating modes to increase long-haul freighter capacity beyond this base schedule, however, such capacity is likely to be limited and will take time to implement."
Cathay Pacific's planned freighter flight frequencies from Hong Kong, compared to a week in February 2021
| Destination region | Feb. 21-27, 2021 | February 2022 (weekly) |
|---|---|---|
| Americas | 21 | 7 |
| Europe | 3 | 0 |
| Mainland China | 11 | 14-16 |
| Middle East/India | 13 | 17 |
| North Asia | 9 | 11-12 |
| Southeast Asia | 7 | 5-7 |
| Australia | 1 | 0 |
NOTE: 2022 frequencies for North and Southeast Asia do not include the Lunar New Year week.
Dive Insight:
The reduction in long-haul capacity is another challenge for shippers reliant on air transport, who have already been dealing with capacity constraints, climbing rates and limited alternatives in the past year. Omicron now casts a long shadow over the transport mode as 2022 begins.
"With new variants of COVID causing uncertainty in the global recovery, we believe that air cargo capacity will remain constrained through calendar year 2022 and a full recovery is not anticipated until at least 2024," FedEx Chief Marketing Officer Brie Carere said on a December earnings call.
The reductions come as Cathay Pacific was beginning to build back capacity that had been lost due to the impact of COVID-19. Its November 2021 cargo capacity was 71% of its pre-pandemic capacity, the highest level since the pandemic began, Chief Customer and Commercial Officer Ronald Lam said in a company press release.
The omicron variant of COVID-19 has spread and pushed crew members at various airlines to the sidelines.
"The Omicron variant has also caused havoc over the festive season as more than 7,500 flights were reportedly cancelled over the Christmas weekend," DB Schenker said in a Tuesday market update. "Chinese and US airlines appear to be the hardest hit. Companies say the cancellations are due to airline crews testing positive."
Cathay Pacific's decline in freighter flight frequencies is particularly pronounced in outbound capacity to the Americas. Its base freighter schedule in February has seven weekly flights from Hong Kong International Airport to the Americas. In the week starting Feb. 21, 2021, Cathay had 21 of these flights scheduled.
"This overall reduction in capacity will severely impact contracted cargo," said the company's announcement. "Our local teams will contact affected customers directly with further information regarding contracted cargo."
