Cathay Cargo reports a busy peak season and looks ahead to 2025

Cathay Cargo’s freighter aircraft were completely full on inbound flights into the US during this year’s peak season, according to Cathay Pacific head of global cargo partnerships Chris Bowden and Cathay Cargo vice president Americas Fred Ruggiero.

Ruggiero said that inbound aircraft were so full during the peak it was questionable whether the airline would have been able to find extra space even if it had wanted to.

Bowden agreed, saying that the carrier had been “maxed out” into the US and that rates were as high as they would go, despite many in the market suggesting that the peak had not been quite as strong as was expected.

Asked whether that had been down to the e-commerce boom reported this year, Bowden said: “[In the last quarter] you get the key electronics players, Apple, Samsung etc, running out their new models so there is a mixture of that, plus e-commerce, plus traditional cargo.

“We are quite well weighted across different sectors within cargo. So we have exposure to e-commerce but then we also carry regular cargo as well and demand is the same across all the sectors.”

He added that companies switching to a China+1 strategy to diversify their supply chains had also helped fuel demand at the airline as much of these volumes transited through Hong Kong.

Ruggiero added that the airline had also been busy on outbound flights from North America – although not to the extent of inbound – with pharma, perishables and oversized pieces.

He added that the grape season was “looking strong” as was the cherry season out of South America.

Demand expectations

With demand expected to increase next year – IATA recently predicted a 5.8% increase next year and Xeneta expected 4-6% – and Cathay’s capacity maxed out this year, how will the airline handle any extra demand growth, particularly as Hong Kong’s third runway system is now up and running?

“Cathay is still on a rebuild journey from the pandemic,” said Bowden. “So our freighters are flying full schedules – as they have been over the past couple of years – but the passenger network is still re-building.

“That passenger network will be rebuilt in the first quarter of next year and we will be back up at 100% of our pre-pandemic capacity so that will help us.

“And as we re-allocate the passenger fleet to the right routes, that adjusts our capacities as well so there is a bit of a rebalancing happening as well.”

He added that looking further ahead, Cathay is due to start receiving the first of the six Airbus A350 freighters it has on order in 2027, while it has options for 20 more.

It then has the option of either maintaining or retiring its “relatively young” 20 Boeing 747 freighters depending on how the market is progressing.

The airline also has more than 100 passenger aircraft on order that will add cargo capacity when they start to be delivered next year.

Meanwhile, the carrier can adjust its network to meet various demand peaks out of different locations.

For example, Ruggiero said that on outbound flights from North America, the airline will likely adjust some flights for the cherry season.

“The Chilean cherry demand is very strong so we actually try to divert some aircraft to Miami [missing a call elsewhere in the US] to pick up the extra capacity of cherries and bring them to Asia,” he said.

As well as investing in its fleet, Cathay Cargo has also been through a rebranding, has re-launched several products and is developing its digital services to make the customer experience more seamless.

This includes building API connections straight into larger freight forwarder’s booking systems, including those of DSV, DB Schenker and DHL Global Forwarding.

Ruggiero added that investments are also being made into Artificial Intelligence to create efficiencies for the tasks being carried out by Cathay staff.

“There are even further steps going on with that system where things are being enhanced to allow us to start building in allocations,” Ruggiero said. “Once we build allocations into the formula it becomes even more seamless.”

The airline is also hoping to add spot rates into the booking system and to provide customers with more statistics and performance data to help guide decision-making.

Cathay Cargo has also been adding its capacity to third-party booking portals where it makes sense to, for example in locations where those portals are key players.

“We want the customer to use whichever system is most comfortable for them but we want that system to talk with our system and then it delivers the best efficiency to us as well,” said Bowden.

Investing in SAF

Another investment for the airline is in sustainability. Cathay has the target of reaching net zero emissions by 2050 and has launched a corporate Sustainable Aviation Fuel (SAF) programme covering both passenger and cargo.

“If you look at our customers that have signed up for [the SAF programme] in 2024, six of them are cargo customers – Kuehne+Nagel, Schenker, Dimerco, Kintetsu and the Lenton Group,” said Bowden.

“There is a lot of investment on our side because we procure that SAF ourselves and then we try and find partners to buy in and if they don’t buy in, that cost is on us.”

Ruggiero added that demand for SAF is growing as shippers come under pressure to reduce their environmental impact.

“You really have to do it together,” he said. “It cannot be just the shippers, it cannot be just the forwarders, it cannot be just the airlines – everyone needs to work together.”

Chris Bowden. Source: Cathay Cargo

Looking ahead to next year, both Bowden and Ruggiero are quietly confident that it will be another busy 12 months despite the likelihood of tariffs being introduced by incoming US president Donald Trump.

“The airfreight industry is one of the most dynamic industries in the world,” said Bowden. “We suffer from external shocks all the time whether that is tariffs or conflicts.

“But what you always hear is that the industry adapts, you find ways to work. Whatever happens macroeconomically, there will still be airfreight flying.”

Ruggiero added: “Airfreight is still an extremely efficient way of moving freight for a lot of things.

“There are a lot of things, pharmaceuticals, for instance, that you can’t move by ocean – it’s not practical. A lot of perishables cannot be moved by ocean. There are commodities out there that have to be moved by airfreight.”