Hong Kong: Hong Kong's Cathay Pacific is preparing to cancel "many" of the passenger flights it has repurposed to carry only freight, the strongest signal yet that the short-term boom in the air cargo market is weakening, it was reported on Sunday.
Air freight rates have fallen by half from their peak last month, according to TAC Index, the industry's price-guide bible, as demand for personal protective equipment has eased, alternative transportation methods have been employed and global economies continue to slow, the South China Morning Post reported.
"Cargo has been tapering off, and as a result, there will be many cancellations of cargo-only passenger aircraft flights, as the commercial decisions are made closer to the time of the flight," Hong Kong's flag carrier, which operates from the world's busiest air cargo airport, told staff earlier this week.
Cargo revenue has been Cathay's primary source of income for at least three months, as the collapse in air travel has seen passenger revenue dry up. With the grounding of numerous passenger aircraft, which typically carry half the world's cargo, air freight pricing surged on the shortfall in capacity.
The airline operated 900 such return flights that month.
Cathay Pacific operates a dedicated fleet of 20 Boeing 747 freighter planes, and its all-cargo carrier Air Hong Kong flies a dozen more.
The airline generated HK$23 billion from cargo income last year, which accounted for a fifth of overall revenue.