For some airlines, the pandemic presented an opportunity to restructure their networks, add new destinations, drop those that had been underperforming, or adjust the frequency. However, for airlines such as Cathay where connecting traffic was an important part of their business model then rebuilding one part of their network in isolation would have risked the whole business.
Proportionally, the balance of capacity by region is very similar with two-fifths of capacity operated to North East Asia and a further 25% to South East Asia (see chart below). This highlights the dependency that the airline has on the Asian market. Maintaining that historic network balance by region for Cathay Pacific has clearly been important in their recovery and provides a solid foundation for the final part of the recovery.
The slight underperformance of bookings against capacity to longer haul markets such as Western Europe and North America is something that will need to be worked on in the coming months. But perhaps the biggest factor in those regions’ underperformance is inbound demand to China from those markets. Until confidence is restored in the wider inbound China market Cathay’s performance will undoubtedly be impacted.
