Cathay Pacific cargo volume resumes uptrend, but growth small

Cathay Pacific Airways Ltd <0293.HK>, the world's leading international air cargo carrier, said freight traffic has resumed an upward trend thanks to Christmas orders, but the volume is still below peak levels seen in 2010.

Hong Kong's dominant airline, which reported its first meaningful growth in 18 months in September continued to post small year-on-year improvements in freight volume, said Ivan Chu, Cathay's chief operating officer.

"We see some pick-ups (in cargo volume) in the last few weeks due to demand for seasonal Christmas cargo," he told reporters on the sidelines of the Asian Logistics and Maritime Conference on Thursday.

Chu declined to comment on whether the cargo division was profitable. A slump in global freight shipments, coupled with rising fuel prices and slowing demand for premium travel, has sent Cathay into the red in the first half.

Rival Singapore Airlines Ltd has said it plans to park one of its 13 Boeing 747 freighters from January 2013 to May 2014 as it does not foresee any quick improvement. It posted a 54 percent drop in third-quarter profit on bigger losses at its cargo unit.

Cathay, which will announce its October traffic figures next week, moved 2.4 percent more cargo in September from the same month last year due an increase in high-tech products but tonnage declined by 8.3 percent for the first nine months.

Weak demand from Cathay's key markets of China and Hong Kong and slack Asia-to-Europe traffic had forced the airline to park two older 747-400BC cargo aircraft earlier this year.

Partly helped by the company's strategy of using more fuel-efficient and newer 747-800F planes and fewer older planes, its cargo operating yield has improved from the first half of this year, Chu said.

"The 747-800F is the world's biggest cargo aircraft, which can carry 130 tonnes of goods per flight and consumes 20 to 25 percent less fuel," he added.

Cathay's shares closed down 2.7 percent on Thursday, tracking the blue chip Hang Seng Index , which lost 2.4 percent. However, the stock is up about 5 percent this year, lagging a 17 percent gain in the benchmark index.

(Reporting by Alison Leung; Editing by Matt Driskill)