CX Load Factors
 

CX load factor seem to be dropping despite increased in capacity. There is a drop of 240k pax number in Sept. although it increase back in Oct (but with increased capacity), it is still below July/Aug figures.
In the latest report, they are planning to operate 70% of pre-pandemic pax flights AS a group (ie CX n HK express). So CX should be just operating less than 60% of pre-pandemic capacity?

Revenue Pax KM (RPK)
July: 690 million
Aug: 709 million
Sep: 657 million
Oct: 690 million
Nov: 650 million
Dec: 701 million
Jan: 712 million

Available Seat Km (ASK)
july: 780 million
Aug : 806 million
Sep: 785 million
Oct: 814 million
Nov: 807 million
Dec: 862 million
Jan: 862 million

Pax Carried
July: 1.74 million
Aug: 1.78 million
Sept : 1.54 million
Oct: 1:68 million
Nov: 1.63 million
Dec: 1.78 million
Jan: 1.71 million

Load factor
July: 89.3 %
aug: 88 %
sep: 83.7 %
oct: 84.7 %
nov: 80.5%
Dec: 81.2%
Jan: 82.8%

number of flights:
july: 3662
aug: 3779
sept: 3713
oct: they listed 8534 flight sectors in Oct (which include pax n cargoes flight). And not just passengers flight number as per earlier.

There are a lot of places in N Am and SAARC that is still not seeing pre-pandemic frequencies

I’ve also noticed for connecting (non HK O/D) itineraries out of North America, CX has simply not been competitive on price since rebuilding their network after COVID, in Y and in premium classes. On the other hand, competitors such as SQ have been fairly aggressive with frequencies and/or price out of North America.

That is something called "revenue management" in the aviation industry. Obviously given the current limited capacity, CX chooses to cater for the premium passengers first with high fare price.

As for the load factor in July/August/September/October, it is a typical peak season in July and August. And for September, it is a low season while the bad weather on several weekends in Hong Kong severely disrupted the operation of HKG.

Uh, I think all of here are well aware of how revenue management works. The question here is, how well is CX’s current RM positioning the carrier for the present, and for the future, given headwinds they are facing both in restoring pre-COVID capacity, and in the face of an aggressive competitor in the region. And how CX’s need to prioritize O/D traffic over connections due to limited capacity, in a market that may never see pre-COVID O/D traffic for some time, is going to affect the carrier going forward.

CX has talked up September numbers because of student travel, but this really only impacts travel to the UK (students are positioned earlier for most other countries). And even at Heathrow in the past (2018) the route to HK was busier in winter and dropped in popularity in September. Probably the case that traditional holiday months and periods of better weather for HK (winter) will see higher traffic. They do call the cooler months "chairman season" in HK for when the bosses come in...

My long term concern with load factors though is that more mainland carriers are coming back online and undermining the usefulness of HK as a transit hub for China, which is a niche that it has enjoyed since reopening without much mainland competition.

CX capacity in ASKs in October 2023 was 59.4% of that in October 2019 (which included Cathay Dragon) whereas in September 2023 it was 58.2% compared to September 2019, showing a steady increase but still a long way to go to 100%. As you all know, 60 to 100 requires an increase of 67% from base.
July, August and December have always been the high load factor months with blips up for CNY and Easter also. September and October were more heavily weighted to business (front end) traffic. September student loads seem to have been growing disproportionally over the years.

The capacity of Mainland carriers to Europe has resumed quite fast but the load factor of CX European routes is still very high even in September and October. I think the Australian market is a similar story. CX doesn’t need to worry about the competition for now.

I will say before 2019, the main reason of over-supply in the Mainland is the subsidies provided by the government of low-tier cities. These heavily-subsidized routes can breakeven with a 10%-20% load factor. But given the current fiscal situations of these governments, which you may read in some financial news, I think we will never see that size of subsidies again.

In the latest newsletter issued by Cathay, it says CX will be at 70% of pre-pandemic capacity, while O&D passengers will resume to 95% of the pre-pandemic level.

Obviously CX is catering for high-yield O&D demand first and they are fine with the 85% load factor.

https://news.cathaypacific.com/catha...r-october-2023

Their references to capacity versus pre-COVID are on a group-wide basis. KA is gone and UO has already exceeded its pre-COVID size and has partially cannibalised mainline capacity (e.g. TPE, MNL - never previously UO routes), which really obscures things.

What does that mean for an apples-to-apples comparison of mainline capacity vs. pre-COVID? CX knows but doesn’t release this information. My guess is that the overall qualitative picture is something along the lines of: UO has grown, legacy CX recovery is on track and legacy KA recovery is lagging.

In 2019 Cathay Pacific reported combined Cathay and Cathay Dragon numbers so the muddying only comes from UO to MNL and TPE in 2023 which I believe to be too small to change the result significantly. Certainly UO is only one A321 a day to MNL compared to a total of 5 CX of which only 2 are A321s, so about 200 seats for UO vs about 1300 for CX.

60% of flights is different from 60% of capacity. On average, CX is operating smaller planes than in 2019.
ALso the fall 2019 is a low base as protests strongly affected traffic with mainland (and some other destinations).
Comparison with number of pax in first half of 2019 (CX+KA), would be a more meaningful comparison for 2023 (CX+UO).

For as long as I can remember pre pandemic I was able to fly PVG-SFO round trip for around $3500 USD in biz. CX now wants $6000 for this.

I’ll start flying them again when they get back to $3600 which I’m sure they will at some point next year as the China-USA nonstop routes start to ramp up.

I am not sure, may be correct but not by a wide margin. They have the same number of single aisle as before craft but these now have greater capacity, being A321NEOs. The A330s have reduced by 12. I have not attempted to see what the seat mix before and after is. Long haul are essentially the same total number but with 12 A350s in place of B777ERs, perhaps 20 seats less on the 12 switched, but more B777ERs are parked. Finally there are the few still parked regional B777s with their 438 seats. (I continue to wonder how they plan to replace these ageing birds. I would like to see a regionalised A35K but fear a B787.) So gut feel is less seats per average bird, but not by much.