Cathay Pacific said it will only be able to meet important year-end capacity goals if the Hong Kong government eases travel restrictions as COVID-19 vaccination rates increase.
The carrier remains “hopeful of achieving” its target of restoring passenger capacity to 30% of pre-pandemic levels in the fourth quarter, Cathay chairman Patrick Healy said during a media briefing on Aug. 11. However, he stressed that an important caveat is that it depends on some restrictions being relaxed.
Healy noted that Cathay faces demand-side restrictions affecting passengers such as quarantine measures and other border rules related to the COVID-19 pandemic. It also has to deal with supply-side restrictions in the form of crew quarantine rules that require “closed loop” duty cycles.
Cathay is hoping that increasing vaccination rates among its crew and the general public will “lead to some relief on constraints on both the demand side and the [supply] side,” Healy said. The carrier reported that 99% of its pilots and 91% of its cabin crew based in Hong Kong have either booked or received their vaccinations.
Healy acknowledged that many industry analysts predict leisure traffic and LCC demand are likely to recover before premium and long-haul traffic. If this is true, Cathay’s HK Express LCC subsidiary will be well-positioned to capture the increased leisure demand, he said.
The Cathay Group’s dual-brand model, with the parent carrier and HK Express, means it has the “tools at our disposal to benefit from the recovery in whatever shape or form that may take,” Healy said.
Fleet growth for HK Express remains “an open question,” he added. Cathay wants to keep HK Express as the largest LCC in Hong Kong. This means “it is very important that it keeps pace with market growth and grows its fleet as demand recovers to ensure it maintains a clear number one position in the [LCC] market,” Healy said.
By the end of 2024, the HK Express aircraft fleet will be “well into the 40s,” Greg Hughes, Cathay’s chief operations and service delivery officer, said. It currently has 28 aircraft in its fleet.
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