Cathay Pacific 2015 Annual Report Download - page 21

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Annual Report 2015
19
Cathay Pacific and Dragonair carried 1.8 million tonnes of cargo and mail in 2015, an increase
of 4.4% compared to 2014. The cargo revenue of Cathay Pacific and Dragonair in 2015 was
HK$20,079 million, a decrease of 8.9% compared to the previous year. This mainly reflected a
reduction in fuel surcharges consequent upon lower fuel prices. Capacity for Cathay Pacific
and Dragonair increased by 5.4%. The load factor decreased by 0.1 percentage point to 64.2%.
Strong competition, overcapacity, unfavourable foreign currency movements and the
reduction in fuel surcharges put pressure on yield, which decreased by 13.2%, to HK$1.90.
Demand was strong in the first quarter of 2015, assisted by industrial action at ports on the
west coast of the United States. Overall demand was weak for the rest of the year, particularly
on European routes. We reduced capacity on some routes in line with reduced demand. We
carried a higher proportion (57.0%) of total cargo shipments in the bellies of passenger aircraft.
Review of Operations
Cargo Services
Loyalty and Reward Programmes
Available tonne kilometres (“ATK”), load factor and yield for Cathay Pacific and
Dragonair cargo services for 2015 were as follows:
ATK (million) Load factor (%) Yield
2015 2014 Change 2015 2014 Change Change
Cathay Pacific and Dragonair 16,481 15,630 +5.4% 64.2 64.3 - 0.1%pt -13.2%
0
10,000
5,000
15,000
20,000
25,000
30,000
2011 2012 2013 2014 2015
0
4,000
8,000
12,000
20,000
16,000
2011 2012 2013 2014 2015
Capacity – cargo and mail ATK
HK$million
Revenue
Milliontonne
kilometres
• Cargo profits in 2015 benefited from low fuel prices. Low
fuel prices meant lower fuel surcharges. This adversely
affected revenue and yield. Low fuel prices also meant
more market capacity. This also adversely affected yield.
So did the depreciation of some currencies.
• We managed capacity in line with demand. We reduced
schedules and made ad hoc cancellations where
necessary.
• We carried a higher proportion (57.0%) of total cargo
shipments in the bellies of passenger aircraft.
• Demand for cargo shipments from Hong Kong was
strong in the first quarter of 2015 but weak from then
until the year end peak period. There was no growth in
demand for shipments to Europe in 2015. Demand for
shipments to North America was better than expected
and strong on the Indian route.
• Exports of cargo from Shanghai, Chengdu, Chongqing
and Zhengzhou, particularly shipments of consumer
electronic products to North America, are key sources of
cargo revenue. The 2015 revenue from these sources in
Hong Kong dollars was adversely affected by the
weakness of the Renminbi. Our mail business in Mainland
China is growing.