Cathay Pacific warns of declining airfares and unsure cargo outlook, shares fall 10% | USAEMALL.com

CARGO OUTLOOK

Based at the world’s busiest cargo airport, Cathay is one of Asia’s largest cargo carriers and has benefited in recent years from rising volumes of e-commerce out of China.

Cathay on Wednesday noted cargo market uncertainty caused by changes to US tariffs this year, in particular the cancellation of a duty-free exemption for low-value packages from China and Hong Kong in early May.

However, the airline said its cargo business showed resilience and capacity was being redeployed to markets that remained strong. The cargo division’s half-year revenue rose 2.2 per cent to HK$11.1 billion, while yields fell 3.4 per cent.

Cathay’s order for 14 more 777-9 planes with GE engines exercised options secured as part of a 2013 order for 21 of the jets, and adds options to purchase another seven in the future, the airline said.

Cathay said the 14 jets had a list price of US$8.1 billion, but it had secured significant discounts, as is customary for major airlines. It expects the aircraft to be delivered by 2034.

The long-delayed 777-9, Boeing’s latest version of its 777 plane, has not yet been certified by the US Federal Aviation Administration. Boeing CEO Kelly Ortberg said last month the model is undergoing flight testing and the planemaker hopes to start deliveries next year.

Cathay said in March it was expecting its first 777-9 delivery in early 2027.