Cathay Pacific has announced the signing of an offtake agreement with Aemetis for the supply of 38 million US gallons of blended Sustainable Aviation Fuel (SAF) to be delivered over seven years beginning in 2025 from San Francisco International Airport. The SAF purchased can reduce more than 80,000 tonnes of lifecycle carbon emissions, equivalent to the amount of carbon sequestered by more than 1.3 million tree seedlings grown for 10 years. The agreement is also part of the joint procurement initiative for SAF by the oneworld alliance, of which Cathay Pacific is a founding member.

The blended SAF to be supplied under this agreement is 40% SAF and 60% Petroleum Jet A-1 fuel to meet international blending standards. The SAF will be produced at the Aemetis Carbon Zero plant currently under development in Riverbank, California. The facility will use waste wood to produce cellulosic hydrogen, and combine it with wastes and non-edible sustainable oils. It will then be converted into SAF using carbon-neutral hydroelectricity.  It is scheduled to begin deliveries to Cathay Pacific in 2025.

SAF provides significant environmental benefits compared to petroleum jet fuel, including up to 100% reduction in greenhouse gas emissions on a lifecycle basis, depending on the technology used.  It is a vital solution in the decarbonisation of aviation over the next few decades, especially for long-haul flights.

Cathay Pacific continues to pioneer the aviation industry’s transition towards the substantial use of SAF especially in supporting SAF development and deployment in Asia.

In other news, Cathay Pacific has also released its traffic figures for August 2022. The airline’s traffic figures continued to reflect the positive impact of further adjustments to the Hong Kong Special Administrative Region Government’s travel restrictions and quarantine requirements, notably the mandatory hotel quarantine arrangement for inbound travellers.

Cathay Pacific carried a total of 253,907 passengers last month, an increase of 87.6% compared to August 2021, but a 91.3% decrease compared to the pre-pandemic level in August 2019. The month’s revenue passenger kilometres (RPKs) increased 82.7% year-on-year, but were down 86.1% versus August 2019. Passenger load factor increased by 22.2 percentage points to 68.6%, while capacity, measured in available seat kilometres (ASKs), increased by 23.5% year-on-year, but decreased by 83.8% compared with August 2019 levels. In the first eight months of 2022, the number of passengers carried increased by 133.5% against a 1.6% increase in capacity and a 141.9% increase in RPKs, as compared to the same period for 2021.

The airline carried 104,851 tonnes of cargo last month, a decrease of 15.6% compared to August 2021, and a 35% decrease compared with the same period in 2019. The month’s cargo revenue tonne kilometres (RFTKs) decreased 23.3% year-on-year, and were down 35.1% compared to August 2019. The cargo load factor decreased by 10.7 percentage points to 67%, while capacity, measured in available cargo tonne kilometres (AFTKs), was down by 11.1% year-on-year, and was down by 41.1% versus August 2019. In the first eight months of 2022, the tonnage decreased by 8% against a 25.4% drop in capacity and a 32.4% decrease in RFTKs, as compared to the same period for 2021.

Travel

Chief Customer and Commercial Officer Ronald Lam said: “We continued to see improved performance in our travel business in August. Average daily passenger numbers further increased month on month and exceeded 8,000. Passenger flight capacity increased 28% compared with July, although we still only operated about 16% of pre-pandemic levels. Meanwhile, load factor remained high at close to 69%.

“Following the Hong Kong SAR Government’s adjustment to the hotel quarantine arrangement for travellers entering Hong Kong from 12 August, we observed an increase in inbound traffic to our home hub. This was particularly so for long-haul traffic from the US, Canada and Europe. Meanwhile, our passenger flight capacity to the Chinese Mainland remained restricted, although we were able to resume carrying passengers to Zhengzhou, Qingdao and Xiamen in August.

“Student traffic from the Chinese Mainland to the US represented a significant portion of our passenger traffic last month. On top of our existing services to New York, Los Angeles and San Francisco, we resumed flights to Chicago and Boston in August for the first time this year to cater to the strong demand. As a result, our US-bound flights managed 80% load factors. Apart from student traffic, our US routes were also boosted in the other direction by transit traffic travelling to Southeast Asia, the result of greater connectivity from increased flight frequency.

Cargo

“In terms of cargo, we operated a full freighter schedule in August, which was supported by increased passenger flights as well as regional cargo-only passenger flights. While our overall cargo flight capacity was down 11% compared with the same period last year, this was because we operated a significant number of long-haul cargo-only passenger flights at that time. Overall, we operated 59% of our pre-pandemic cargo flight capacity in August. Demand has remained flat throughout the summer months, but we have continued to make all preparations to ensure smooth operations as we step into the cargo peak season.

“Supporting the Cathay Pacific Group’s net-zero carbon emissions by 2050 target, we have extended our carbon-offset programme, Fly Greener, to our air cargo services. The programme not only enables our cargo customers to calculate the carbon emissions for their shipments, but also allows them to purchase carbon offsets to support carbon-offset projects. All selected projects are certified by the internationally recognised non-profit organisation, Gold Standard, to ensure their carbon reductions and societal benefits are verified to have met their standards.

“Furthermore, in an ongoing effort to improve the quality of our service delivery, we have introduced two new Cargo iQ milestone measurements – freight out of warehouse (FOW) and freight into warehouse (FIW). These additional milestones will bring greater transparency to the overall shipment journey, and are now operational at the Cathay Pacific Cargo Terminal in Hong Kong, with plans in place to roll them out across our network in the near future.

Outlook

”Looking ahead, we welcome the Hong Kong SAR Government’s adjustments to the mandatory quarantine arrangements for locally based aircrew arriving in Hong Kong earlier this month. While we will continue to add back more flights as quickly as is feasible to strengthen the network connectivity of the Hong Kong aviation hub, this will still take time as we build operational readiness and undertake a substantial amount of training and aircraft reactivation.

“This, combined with other operational complexities, means that capacity can only be increased gradually over a period of several months. As such, we are now projecting by the end of the year to be able to operate about one-third of our pre-pandemic passenger flight capacity – about double the passenger flight capacity we operated in August – and about two-thirds of our pre-pandemic cargo flight capacity. As the market and operating conditions further improve moving forward, we will aim to add back more flights where feasible.

“On the travel side, we expect that demand will remain solid going into the fourth quarter. Transit traffic between the Americas and Southeast Asia and India is anticipated to be strong, while traffic between Australia, New Zealand and other parts of our network is also expected to increase.

“As more regional destinations such as Japan continue to adjust their inbound travel policies, we will continue to monitor demand and adjust our passenger flight capacity accordingly. We intend to add about 200 pairs of passenger flights in October, primarily to regional destinations such as Osaka, Seoul (Incheon), Bangkok, Kuala Lumpur and Manila, and also to long-haul destinations such as Vancouver, Sydney and Melbourne.

“Regarding cargo, whilst the anti-pandemic measures in the Chinese Mainland may affect supply chains, it has been encouraging to see New Product Introduction (NPI) shipments begin in September, which bodes well for the expected solid peak season. As a result, we will continue to maximise freighter capacity, supported by increased passenger services and regional cargo-only passenger flights.”

The full August figures and glossary are on the following pages.

Cathay Pacific aircraft photo gallery:

Cathay Pacific Airways released this interim financial report:

Cathay Pacific Airways will return to Dubai on October 2, 2022 with three weekly flights.

The company also issued its traffic numbers for June:

Cathay Pacific released its traffic figures for June 2022. The airline’s traffic figures continued to reflect the positive impact of further adjustments to the Hong Kong Special Administrative Region Government’s travel restrictions and quarantine requirements, notably the circuit-breaker mechanism, effective from 1 June.

Cathay Pacific carried a total of 150,077 passengers last month, an increase of 269.2% compared to June 2021, but a 95.2% decrease compared to the pre-pandemic level in June 2019. The month’s revenue passenger kilometres (RPKs) increased 320.2% year-on-year, but were down 91.7% versus June 2019. Passenger load factor increased by 45.3 percentage points to 67%, while capacity, measured in available seat kilometres (ASKs), increased by 36.2% year-on-year, but decreased by 89.3% compared with June 2019 levels. In the first six months of 2022, the number of passengers carried increased by 113.5% against a 26.6% decrease in capacity and a 129.8% increase in RPKs, as compared to the same period for 2021.

The airline carried 104,559 tonnes of cargo last month, a decrease of 4.4% compared to June 2021, and a 36.2% decrease compared with the same period in 2019. The month’s cargo revenue tonne kilometres (RFTKs) decreased 14.6% year-on-year, and were down 39.1% compared to June 2019. The cargo load factor decreased by 12.1 percentage points to 68.4%, while capacity, measured in available cargo tonne kilometres (AFTKs), was up by 0.5% year-on-year, but was down by 44.1% versus June 2019. In the first six months of 2022, the tonnage decreased by 4.3% against a 31% drop in capacity and a 35.7% decrease in RFTKs, as compared to the same period for 2021.

Travel

Chief Customer and Commercial Officer Ronald Lam said: “We continued to see positive developments in June following further adjustments to travel restrictions in Hong Kong. As sentiment for travel continued to improve, we resumed more flights to more destinations and deployed additional passenger flight capacity – about 170% more than we did in May – to meet the demand. However, we still only operated about 11% of our pre-pandemic capacity. Load factor increased to 67% and we carried on average more than 5,000 passengers per day.

“The additional flights that we operated helped provide greater connectivity for our transit passengers, notably from the Chinese Mainland. We also saw increased demand for flights between the UK and Australia, as well as between the US and the Philippines. As is typical for June, demand for student travel into Hong Kong was strong and our flights from the UK averaged high load factors of 93%. We also resumed flights to Auckland in June, which saw good demand not only to and from Hong Kong, but also between New Zealand and the UK as well as India. On the other hand, our flights to the Chinese Mainland remained limited by capacity restrictions relating to anti-pandemic measures there.

Cargo

“For cargo, we resumed our full freighter schedule in June with increased flights to the Americas and Europe. This was complemented by the belly capacity provided by our increased passenger flights as well as more than 600 pairs of regional cargo-only passenger flights. In total, we operated about 56% of our pre-pandemic cargo flight capacity last month.

“Tonnage picked up month on month in our home market, Hong Kong, underpinned by more stable cross-border feeder services. Tonnage from the Chinese Mainland also improved as pandemic restrictions eased. Cargo traffic from the Americas and Europe has also been encouraging, with increased frequencies on our long-haul services bringing more cargo to Asia. Overall, tonnage increased by more than 13% month on month, but was below the levels of June last year. This was largely due to reduced consumer demand from North American and European markets, and supply chain disruptions taking time to recover.

Outlook

”Looking ahead, we welcome the Hong Kong SAR Government’s recent decision to suspend the circuit-breaker mechanism effective 7 July, which will help provide customers with far greater certainty and confidence when flying to and transiting via Hong Kong. We are also encouraged that the Government is considering possible adjustments to the number of days inbound travellers will need to spend in designated quarantine hotels after arriving in Hong Kong. We continue to actively add back flight capacity as we work to rebuild our hub and network.

“On the passenger side, we expect travel sentiment will continue to improve over the coming months. Assuming current travel and operating restrictions as at the time of this report remain unchanged, we anticipate we will be able to operate up to about a quarter of our pre-pandemic passenger flight capacity levels by the end of the year. Having said that, the pandemic situation remains highly dynamic and we will need to remain agile with regards to managing our flight capacity.

“In terms of cargo, we are anticipating that demand will pick up as we step out from the traditionally slower summer months and into the usual peak cargo season. Notwithstanding the various operational challenges that will be involved in preparing for this increased demand, we target to be operating about 65% of our pre-pandemic cargo flight capacity by the end of this year.

“We have enjoyed improved cash performance since the further adjustments in the travel restrictions and quarantine requirements came into effect on 1 May. We expect that the anticipated capacity increases will continue to have a positive impact on our monthly operating cash burn, such that we are targeting to be operating cash generative going forward. As the pandemic situation remains uncertain, we continue to maintain our focus on prudent cash management.”

The full June figures and glossary are on the following pages.

In other news, Cathay Pacific opened the third runway at its Hong Kong hub:

Cathay Pacific on July 8, 2022 operated the very first commercial flight to land at the new Third Runway of the Hong Kong International Airport (HKIA). The landing of flight CX3251 from Shanghai (Pudong), operated by our Boeing 747-400F freighter, at 08:27 local time on 8 July 2022 was conducted as part of the operation familiarisation on the Third Runway. This allows stakeholders from the aviation community to become familiar with the related operating procedures and collaborative arrangements.

Cathay Pacific aircraft photo gallery:

Cathay Pacific today released its traffic figures for May 2022. As the recent adjustments to the Hong Kong Special Administrative Region Government’s travel restrictions and quarantine requirements became effective in phases, the airline’s May 2022 traffic figures started to reflect the positive impact of those changes.

Cathay Pacific carried a total of 57,982 passengers last month, an increase of 141.5% compared to May 2021, but a 98% decrease compared to the pre-pandemic level in May 2019. The month’s revenue passenger kilometres (RPKs) increased 164.4% year-on-year, but were down 97.1% versus May 2019. Passenger load factor increased by 33.7 percentage points to 60.5%, while capacity, measured in available seat kilometres (ASKs), increased by 16.8% year-on-year, but decreased by 96% compared with May 2019 levels. In the first five months of 2022, the number of passengers carried increased by 59.1% against a 48.5% decrease in capacity and a 49.3% increase in RPKs, as compared to the same period for 2021.

The airline carried 92,426 tons of cargo last month, a similar level as May 2021, but a 45.1% decrease compared with the same period in 2019. The month’s cargo revenue tonne kilometres (RFTKs) decreased 32.5% year-on-year, and were down 59.9% compared to May 2019. The cargo load factor decreased by 5.3 percentage points to 75.7%, while capacity, measured in available cargo tonne kilometres (AFTKs), was down by 27.7% year-on-year, and was down by 66.1% versus May 2019. In the first five months of 2022, the tonnage decreased by 4.3% against a 38.9% decrease in capacity and a 41% decrease in RFTKs, as compared to the same period for 2021.

Travel

Chief Customer and Commercial Officer Ronald Lam said: “The introduction of further adjustments to travel restrictions and quarantine requirements in Hong Kong from 1 May was a welcome development, although our business during the month remained constrained. We increased our passenger flight capacity by 78% compared with April, but we still only operated about 4% of our pre-pandemic levels. Traffic volume in terms of RPK increased 94% month on month, and this was driven primarily by long-haul flights. As a result, overall load factor reached 60.5%.

“The additional passenger flight capacity we mounted in May provided better connectivity for our transit passengers, particularly those travelling from the Chinese Mainland to long-haul destinations such as the US, Europe and Australia. Demand for inbound flights to Hong Kong saw substantial growth, driven by pent-up demand out of North America, the UK and Europe. We also resumed flights to India last month with services to Delhi and Mumbai. On the other hand, we continued to operate limited frequencies into the Chinese Mainland to comply with ongoing capacity restrictions.

Cargo

“Regarding cargo, the situation in Shanghai continued to affect demand, although tonnage gradually picked up as COVID-19 restrictions started to ease towards the end of May. As for Hong Kong, volumes improved as cross-border feeder services between Shenzhen and Hong Kong allowed for a more stable flow of cargo, although it remains below the capacity available prior to the fifth wave of COVID-19 in Hong Kong. Demand from other parts of our network remained relatively strong throughout the month. Overall in May, we operated about 34% of our pre-pandemic cargo flight capacity, while load factor was 75.7%.

“Last month also saw the expansion of our joint business agreement with Lufthansa Cargo to include Swiss WorldCargo. Cathay Pacific Cargo will expand its collaboration on trade lanes between Hong Kong and Europe to provide even greater choice and value for our cargo customers.

“Additionally, our Cargo and Lifestyle businesses have jointly developed a door-to-door solution that enables customers in Hong Kong to enjoy fresh fruit and vegetables sourced from premium producers in Northeast Asia and delivered directly to their homes. This fresh produce is available through the Cathay shop.

Outlook

“The first quarter of 2022 saw a tightening of travel restrictions and quarantine requirements as Hong Kong continued to fight against COVID-19. Such measures have restricted our ability to operate beyond only a fraction of our passenger services and have significantly reduced our cargo capacity. However, with the recent adjustments to travel restrictions and quarantine requirements, we have been able to resume more flight capacity in the second quarter. Given a strong underlying cargo performance coupled with our cost-management measures implemented over the past two years, our consolidated losses in the first half of 2022, while substantial, are expected to be lower than the consolidated losses reported in the first half of 2021.

“Earlier this month, the Hong Kong SAR Government agreed to extend the drawdown period of the HK$7.8 billion loan facility for 12 months to 8 June 2023. The further extension of the drawdown period is greatly appreciated and will provide us with flexibility to manage our liquidity position.

“Looking ahead to June and beyond, as travel demand continues to improve over the coming months, we will increase passenger flight capacity as much as is practicable under the confines of ongoing restrictions. Cathay Pacific started the year operating flights to 29 destinations and we target to double that by the end of the year. As of June, we are already halfway towards reaching this target with 45 destinations resumed. We will be keeping a close eye on the opening up of travel activities in nearby countries, such as Japan and South Korea, and will look to operate flights to capture potential demand wherever possible. We also expect transit traffic to improve and become more diversified, in particular between the UK, Australia and New Zealand, as well as North America and Southeast Asia.

“On the cargo side, we have been able to progressively add long-haul freighter services on both Transpacific and European routes with a full freighter schedule operating from June onwards. This will be further supplemented by increased passenger flight frequencies and cargo-only passenger services to provide additional lift. With disrupted supply chains in Shanghai and elsewhere in the world, the short-term outlook for our air cargo business remains positive, whilst we currently remain confident for a solid traditional peak season later this year.”

The full May figures and glossary are on the following pages.

Cathay Pacific Airways is planning to reroute its long-distance Hong Kong – New York (JFK) route to avoid Russian airspace.

The planning to operate the 10,326 mile route south of Russia, via Europe and the North Atlantic in 17 hours.

More from Bloomberg:

Cathay Pacific Airways released its traffic figures for February 2022 that continued to reflect the airline’s substantial capacity reductions in response to significantly reduced demand as well as travel restrictions and quarantine requirements in place in Hong Kong and other markets amid the ongoing global COVID-19 pandemic.

Cathay Pacific carried a total of 31,253 passengers last month, an increase of 47.9% compared to February 2021, and a 98.9% decrease compared to the pre-pandemic level in February 2019. The month’s revenue passenger kilometres (RPKs) increased 5.2% year-on-year, and were down 99% versus February 2019. Passenger load factor increased by 33.8 percentage points to 47.6%, while capacity, measured in available seat kilometres (ASKs), decreased by 69.4% year-on-year, and decreased by 98.4% compared with February 2019 levels. In the first two months of 2022, the number of passengers carried increased by 8.6% against a 72.8% decrease in capacity and a 12.5% decrease in RPKs, as compared to the same period for 2021.

The airline carried 65,126 tonnes of cargo last month, a decrease of 20.9% compared to February 2021, and a 50.4% decrease compared with the same period in 2019. The month’s cargo revenue tonne kilometres (RFTKs) decreased 53.3% year-on-year, and were down 67.9% compared to February 2019. The cargo load factor increased by 0.9 percentage points to 80.5%, while capacity, measured in available cargo tonne kilometres (AFTKs), was down by 53.8% year-on-year, and was down by 75.8% versus February 2019. In the first two months of 2022, the tonnage decreased by 27.1% against a 59.1% drop in capacity and a 59.6% decrease in RFTKs, as compared to the same period for 2021.

Travel

Chief Customer and Commercial Officer Ronald Lam said: “The operating environment for Cathay Pacific remains very challenging. Travel and operational restrictions in place in Hong Kong continued to constrain our ability to operate more passenger flight capacity in February and we operated below 2% of pre-COVID-19 levels, a reduction of about 28% compared with January 2022.

“We have remained as agile as possible, deploying passenger flight capacity to cater to last-minute demand, on top of ongoing traffic from the Chinese Mainland to long-haul destinations as well as post-Chinese New Year traffic from Hong Kong to the Chinese Mainland. We also saw some demand for flights to Australia, notably student traffic from the Chinese Mainland and Hong Kong. As a result, we carried more passengers in February than we did in January. Load factor edged up to reach about 48%.

Cargo

“We continue to operate a reduced long-haul cargo schedule in light of ongoing crew quarantine measures and in February we operated around 25% of our pre-COVID-19 cargo flight capacity. Tightened requirements for cross-border trucking between the Chinese Mainland and Hong Kong, as well as the surge in COVID-19 cases in Hong Kong, reduced demand from our home market. Furthermore, the anticipated market recovery from Asia to long-haul destinations was slower than expected post-Chinese New Year.

“In order to mitigate these headwinds, our teams focused on regional routes and we saw encouraging demand on these services. Of particular note was the demand for Rapid Antigen Test (RAT) shipments, which was strong throughout the month and continues to be so. As of the end of February, we have delivered over 13 million RAT kits to Hong Kong. We will continue to support the Government’s anti-pandemic efforts with the delivery of important medical supplies.

Outlook

”Looking ahead in March, on the travel side we originally expected that the majority of passenger traffic would continue to come from our Chinese Mainland routes. However, stricter capacity restrictions have since been put in place by the Chinese Mainland authorities as part of their pandemic control measures. These, together with the current restrictions in Hong Kong, mean that we do not foresee significant signs of recovery in passenger travel demand in March.

“Regarding cargo, we are re-deploying freighters to North Asia and the Indian sub-continent to maximise opportunities within the region while our ability to operate long-haul services remains constrained. Nevertheless, we are continually looking to increase our long-haul cargo flight capacity where possible, and we have resumed freighter services into Atlanta, Houston and Miami in the US. Our total Hong Kong export volumes will likely remain under pressure throughout the month. Despite this, overall demand from other markets is strengthening and we will look to capture as much of this opportunity as possible.”

The full February figures and glossary are on the following pages.