Pro-democracy protests in Hong Kong have cast a dark shadow over Cathay Pacific Group as it warned of a “challenging and uncertain” short-term outlook.
Inbound travel slumped by more than a third in October following a similar level of decline the previous two months.
Combined Cathay Pacific and Cathay Dragon passenger carryings fell by more than 7% in October to 2.7 million over the same month last year.
The passenger load factor dropped by four percentage points to 77.6% and the Hong Kong-based airline combine has been forced to cut capacity due to weak forward bookings.
Chief customer and commercial officer Ronald Lam said: “Overall we foresee a challenging remainder of 2019 for our airlines.
“We expect our second-half financial results will be significantly below those of our first-half. The short-term outlook remains challenging and uncertain.”
His comments follow five months of political unrest and street violence which has escalated this week.
Lam added: “It continues to be a challenging time for both the Cathay Pacific Group and for Hong Kong.
“In response to weakened travel sentiment to and from Hong Kong, we have so far reduced our passenger flight capacity against our original schedule by 2%-4% between August and October, and 6%-7% for November and December.
“In October, demand for travel into Hong Kong remained weak with our inbound passenger traffic seeing a year-on-year decline of 35%, consistent with the trend seen in both August and September.
“The drop in outbound Hong Kong traffic was 13% in October, again similar to the trend over the past two months.
“Transit traffic via Hong Kong remained relatively less affected.
“Our passenger load factor dropped by 4 percentage points to 77.6% compared to the same time last year. Apart from reduced traffic volume and load factor, overall passenger yield also continued to be under significant pressure.
“Mainland China routes in particular felt significant pressure with weak travel sentiment to Hong Kong by mainland tourists.
“Demand for premium class travel was also sluggish with passenger volume seeing a double-digit dip in October, traditionally a peak month for business travel.
“Japan routes were the star in our network – the Rugby World Cup generated good demand, especially from England and South Africa when both teams advanced to the final.
“Looking ahead, our advanced bookings continue to show weakness in both inbound and outbound Hong Kong traffic for the rest of 2019, partly offset by moderately increased transit passengers via Hong Kong.”
He said: “Despite these short-term challenges, our strong commitment to the long-term development of Hong Kong and our airlines remains the same.
“We continue to invest in our customer experience offering with a number of enhancements, particularly new soft products and dining services in the first and business slass cabins, being rolled out recently.
“Together with our expanded inflight entertainment offering and our new long-haul economy class dining collaboration with a Michelin-starred restaurant group, these enhancements will give passengers more reasons to fly with us.”