A weak market continues to plague cargo carriers; while freight capacity on Cathay Pacific and Dragonair increased by 0.6%, load factor decreased by 1.9 percentage points, to 62.2% and tonnage carried decreased by 0.2%.
Despite the carrier noting that its tonnage stabilised in the second quarter of the year, this was not enough to prevent further decline. Cargo yield fell by 17.6% to HK$1.59 per kilogramme, demonstrating the effect of the continued overcapacity, vast competition and the suspension of fuel surcharges from April.
Cargo demand on European routes remained poor, and a reduction in demand was observed on transpacific routes; however, India was one of the few routes where demand showed improvement. Passenger revenue also showed decline during the period, decreasing 7.8% to HK$33.4bn.
Ultimately, group profits were down in the first half of the year, to HK$353m compared with HK$1.9bn for the same period in 2015.
The Hong Kong carrier reportedly referred to “economic fragility” and “intense competition” as the main characteristics of the operating environment so far this year, adding that the "suspension of fuel surcharges (and) weak currencies in some markets” has contributed to pressure on revenues.
