Cathay Cargo – Number one with more to come

Before we try to plot a course through the uncertainties of the market, I want to highlight one very positive piece of recent news. Hong Kong International Airport (HKIA) has maintained its standing in the Airports Council International (ACI) rankings as the biggest overall air-cargo hub by tonnage in 2022. We’re obviously proud to be the biggest cargo carrier at the world’s leading cargo hub, and proud of our contribution to Hong Kong’s premier air-cargo status. It’s a great testament to our teams, and the collective efforts of Hong Kong’s logistics industry, that we’ve accomplished this despite the operational challenges from the pandemic at the start of the year, followed by a weakening in the market. The accolade also proves that Hong Kong has enduring advantages as a cargo transhipment hub. The city’s logistics industry is world class, and it has a geographical advantage as the aviation gateway to the Chinese Mainland and the manufacturing and consumer powerhouse that is the Greater Bay Area. Our links to this market are now multimodal: we recently operated the first commercial sea-to-air export shipment for Yusen Logistics from the Airport Authority Hong Kong’s HKIA Logistics Park in Dongguan. This is yet another example of Hong Kong’s innovation and drive to remain pivotal to the logistics industry in the Chinese Mainland, and one we are very proud to be involved with. The onset of summer means that we are looking ahead to the second half of the year. The summer freighter network is confirmed and we have negotiated our way through the annual block space agreements (BSAs). The contracts reflect continuing uncertainty in the market, but the overall tonnage commitment is up, and with a more diverse array of customers. This is encouraging as we rebuild our capacity this year ahead of the full operation of the 3RS (Three-Runway System) that comes into effect next year. That said, consumer confidence is yet to rebuild, which explains some of the ‘wait and see’ caution for the second half of the year. But there are some encouraging signs. US imports are increasing, and there is a trend of economic recovery on the Chinese Mainland; meanwhile, some inflationary pressures in Europe seem to be easing, which is a more positive scenario than many were predicting at the start of the year. Our investment in innovation, and our pandemic-honed ability to respond with agility to different situations, both continue to bear fruit. Last month, we launched our Cathay Mail solution, which offers a data link between post offices and our air-cargo systems to enable postal customers to deliver the tracking and visibility that their e-commerce customers demand. We’ll cover that in more detail next month. In other visibility news, we recently carried the first shipment from Indonesia to use our next-generation tracking solution, Ultra Track for Nippon Express. And in Mexico City, we’re responding with agility to the relocation of cargo-only services from MEX to Felipe Angeles International Airport, while minimising disruption to our customers within a tight deadline. We are also proud to be nominated in the Freightweek Sustainability Awards in recognition of our groundbreaking Corporate Sustainable Aviation Fuel (SAF) Programme – the first of its kind in Asia – as well as our investment in SAF producers, our commitment to carbon emissions reductions and the ready availability of carbon offsetting under our Fly Greener programme. We would be grateful for your vote before the closing date of 30 April. I’d like to finish by returning to Hong Kong. It was an honour to host customers and suppliers from five continents for our Cargo Business Update and a tour of the Cathay Cargo Terminal this month, before bringing them to the world-famous Hong Kong Rugby Sevens. It was great to see so many people back in the city – and great for them to appreciate how Hong Kong is now well and truly open for business, and set for a prosperous future as the world’s biggest air-cargo hub.