Cathay Pacific July passenger traffic up 9% on summer travel; jet fuel/kerosene complex bolstered

Hong Kong's Cathay Pacific Airways passenger traffic rose 9.28% on the month and 15.1% on the year to 2 million travelers in July, the company said Aug. 16, bolstering the regional jet fuel/kerosene complex.

"Marking the start of the traditional summer travel peak, July was a milestone month for Cathay Pacific as the airline carried over 2 million passengers for the first time in a single month since our rebuild, while the 85.5% load factor was the highest of any month so far this year," said Cathay's Chief Customer and Commercial Officer Lavinia Lau in a statement.

The increase in passenger numbers contributed to a slight strengthening of the regional jet fuel/kerosene complex with the Platts-assessed FOB Singapore jet fuel/kerosene outright price averaging $98.37/b in July, up from $97.33/b in June and $95.43/b in May, S&P Global Commodity Insights data showed.

Cathay's July revenue passenger kilometers rose 16.1% on the year while the carrier's capacity, measured in available seat kilometers, surged 21.2% on the year.

Over January-July, Cathay carried a total of 12.67 million passengers, up 32.5% on the year.

The airline carried 126,797 mt of cargo in July, up 1.79% on the month and 9.6% on the year. Cargo revenue in ton-kilometers was 0.5% lower on the year at 677,710 mt.

"Given July is traditionally a softer month for demand, this was encouraging and bodes well for August," Lau said.

In July, the airline reported an uptick in perishable goods shipments from Southeast Asia and the Southwest Pacific into Hong Kong and the Chinese Mainland, and increased tonnage through its dedicated freighters for project shipments and outsized cargo.

"We expect that demand will remain at healthy levels as we head towards what we anticipate will be a strong peak from September until the year end," Lau said. To that end, the airline will be increasing its freighter frequencies on transpacific routes and utilizing its long-haul passenger belly services for these requirements.

Jet fuel demand to moderate

Moving forward, Cathay expects demand for its aviation services to receive further support from summer travel demand.

"We expect that robust travel demand seen in July will continue through August, while September will receive a boost from students returning to the United Kingdom ahead of the new school year," Lau said.

Earlier in August, the airline launched a four times weekly service to Ningbo. Separately, the group is targeting to reach 100 destinations within 2025.

Asia's jet fuel appetite surged 430,000 b/d on the year in first-half 2024 as the region saw the sharpest rise in air travel, but the demand growth may taper off in H2 due to the fading impact of aviation demand normalization after the pandemic, analysts and trade sources said.

Growth is expected to be around 270,000 b/d in H2 2024, which would eventually pull down the annual rate of demand growth in 2024 below 2023 levels.

"We estimate that annual Asian jet/kerosene demand growth will moderate to 361,000 b/d in 2024, from 620,000 b/d in 2023, before further easing to 190,000 b/d in 2025 due to fading impact of aviation demand normalization. Regional jet/kerosene demand will recover to 99.5% of the 2019 level by 2025," said Wang Zhuwei, director of East of Suez Oil Market Research at Commodity Insights.

The cash differential for jet fuel/kerosene cargoes loading from Singapore was at minus 67 cents/b to the Mean of Platts Singapore jet fuel/kerosene assessment at the Asian close Aug. 16, narrowing 4 cents/b on the day but widening 30 cents/b from the start of the month, Commodity Insights data showed.