Cargo carrying Cathay Pacific back to operating breakeven: Jefferies

The airline’s cargo yield is also expected to be 2% higher h-o-h in 2H21.

Cathay Pacific is now back to operating breakeven, according to Jefferies, due to their “cargo business and lower cash burn with healthy liquidity.”

Based on the analyst report, the airline’s cargo capacity is at 70% of pre-pandemic levels, buoyed by robust demand in Hong Kong and Southeast Asia (SEA).

The airline management, however, said their current strong yields are unlikely to “continue forever.”

Jefferies predicted that Cathay Pacific’s 2H21 air cargo yields will be 2% higher h-h. Currently, the airline’s 2H21-to-date HK-US and HK-Europe air cargo yields are 30% and 29% higher than in 1H21. 

The airline’s strong cargo will likely offset Cathay Pacific’s pax traffic which the analyst expects to remain weak.

The management said the airline's pax traffic will likely remain at 10% pre-pandemic levels in November and December.

This rate translates into “2021 pax capacity -63% lower YoY and only 8% of 2019 pre-pandemic levels,” according to Jefferies.