The latest cargo data released by Cathay Pacific for June may provide some optimistic answers about the state of the global air freight market, which has been operating under the shadow of ongoing trade disputes. The Hong Kong-based carrier reported significant growth in cargo volume last month, injecting much-needed optimism into the sluggish market.
Strong Performance in June
Cathay Pacific announced that its cargo volume exceeded 130,000 tonnes in June, representing a 6.3% year-on-year increase. This growth was attributed to tariff schedule adjustments and increased demand for freight services from Southeast Asia to the Americas. Available freight tonne kilometers (AFTKs) grew by 5% compared to the same period last year, though load factor saw a slight decrease of 1.1 percentage points. For the first half of 2024, the airline's total cargo tonnage showed an impressive 11.3% increase compared to the previous year.
Key Drivers of Growth
Lavinia Lau, Cathay Pacific's Chief Customer and Commercial Officer, stated: "Our cargo business continued to show year-on-year growth in June, primarily driven by adjustments to tariff schedules and the resulting market behavior." She highlighted significant increases in shipments from Southeast Asia and Taiwan to the Americas, particularly general cargo and high-tech electronics. The airline's pharmaceutical cargo solutions also performed well on long-haul routes, contributing to overall results.
The immediate impact of tariff policy changes was evident. Earlier plans by the U.S. to impose additional tariffs on Chinese goods were postponed, creating a short-term boost in related freight demand. However, Lau acknowledged ongoing uncertainty about July's market outlook, noting the company would closely monitor developments and adjust strategies accordingly.
Market Sensitivity to Trade Policies
In May, Cathay Pacific had reported decreased air cargo demand from Hong Kong and mainland China due to tariff factors and other minor changes. However, the airline's diversified global network helped offset this decline. Subsequently, when the U.S. and China temporarily paused their tariff war and added extra capacity, Cathay's May cargo volumes actually increased, demonstrating the market's acute sensitivity to policy changes.
Currently, a 90-day agreement between the U.S. and China has suspended 10% tariffs on imports from China, set to expire on August 11. Market observers are closely watching how future tariff policies might affect global air cargo markets.
Broader Market Context
Recent data from consulting firm Aevean showed a 20% year-on-year decline in China's exports to the U.S. between April and May, reflecting the negative impact of trade tensions. Yet Cathay Pacific's June performance suggests that even in complex international trade environments, airlines can achieve growth by adapting their operational strategies flexibly.
Cathay's cargo volume growth not only reflects the company's operational effectiveness but also sends a positive signal to the broader air freight market. Amid global economic uncertainties, this development may indicate the market is gradually adapting to new trade patterns and identifying fresh growth opportunities. As global trade dynamics continue to evolve, the air cargo sector will face both challenges and opportunities, with agile operators like Cathay Pacific well-positioned to maintain competitive advantages.