Clear the Air says:
So, like we said, no way do we need a third Chep Lap Kok runway !
DECEMBER 20, 2011
Cathay Scales Back Cargo Ambitions
By DOUG CAMERON, JOANNE CHIU and BOB SECHLER
Cathay Pacific Airways Ltd. said Monday it will scale back plans to expand cargo flying next year and defer the arrival of two newBoeing Co. aircraft, in the latest sign that the slowdown in air freight is deeper and more pronounced than many expected.
The airline’s Hong Kong base is the world’s largest air-cargo hub, but has suffered double-digit declines in traffic since the summer because of slowing export shipments of consumer electronics and other goods from the heart of China’s manufacturing center in the neighboring Pearl River Delta region.
Hong Kong International Airport said Monday that cargo traffic in November fell 6.6% from a year earlier, reflecting the widespread destocking many manufacturers had flagged as customers run down inventories due to the uncertain economic climate.
Passenger airlines have borne the brunt of the reduced demand, with aircraft flying less than half full, according to the International Air Transport Association. The trade group expects the weakness to continue until mid-2012.
Air-cargo specialists also have been forced to react, with FedEx Corp. last week announcing plans to delay the delivery of new Boeing 777s used on flights from Asia to the U.S. Rival United Parcel Service Inc. also has trimmed capacity.
Cathay had hoped demand would strengthen in the second half of 2011 but said in a statement that it now will expand its cargo capacity by 10% next year, down from a previous forecast of 17%. The airline said it is deferring delivery of two new fuel-efficient Boeing 747-8F freighters due next year, citing weak market conditions. It has already received four of its 10-plane order, with another four arriving next year and the final pair in 2013.”This decision will also allow us to defer a portion of our near-term projected capital spending to accommodate the 767 purchases within our previous estimates,” Dave Bronczek, president of FedEx Express, told analysts on a post-earnings conference call last week. “The combined 767 and 777 actions … will contribute to the overall Express profitability.”
The airline’s cargo traffic fell 9.8% in November from a year earlier, with volume down 13.8
FedEx will delay delivery of 11 Boeing 777 freighters, though last week unveiled a new deal to buy 27 of the smaller Boeing 767-300F aircraft.
The world’s largest air cargo shipper acknowledged that the 777 deferrals are partly a continuation of efforts to adjust its network for the recent slowdown out of Asia. But it said the main reason for the action is the higher financial return it expects to reap by bringing in the fuel-efficient 767s to replace older MD-10 aircraft.
Write to Doug Cameron at doug.cameron@dowjones.com and Bob Sechler at bob.sechler@dowjones.com
Corrections & Amplifications
FedEx Corp. is the world’s largest air cargo shipper. An earlier version of this article incorrectly stated that Fedex was the world’s largest package shipper.
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