Cathay Cargo ready to handle increased India-China trade

 In its interim report in June, Cathay Cargo highlighted uncertainties in the market environment due to US tariffs on countries, removal of de-minimis exemption among others. What’s the outlook now

Dominic: The interim report did indeed mention market uncertainties, but it also highlighted growth. Our cargo revenue grew 2.2 per cent to HK $ 11.1 billion.($1.45 billion). and our tonnage increased by 11.4 per cent to 801,000 tonnes. So yes while there was uncertainty, our business was pretty resilient in the first half. The trend continues in the second half.

What has contributed to the resilience ?

Dominic: One of the important aspects of the business resilience is our strong network. We operate passenger flights to over 100 destinations, including 24 in the Chinese Mainland, which is a very important market for us. We operate our Boeing 747 freighters to over 40 destinations around the world and the network is a really important part of our business.

 Globally airlines are adjusting capacity and launching new destinations with the opening of new trade lanes. What is Cathay Cargo doing ?

Dominic: We work very closely with our partners and freight forwarders to understand demand and yield profiles of various markets. So when we add or shift capacity in markets it is in response to the market conditions. Recently, we increased freighter flights to Hanoi (Vietnam). Overall, Southeast Asia remains a big market and we have seen strong growth from there with investments in manufacturing and supply chains. We have started freighter flights to Madrid to cater to strong e-commerce demand from Europe.

How is India market performing for Cathay Cargo ?

Rajesh: As of October-end, we have seen a 11 per cent increase in tonnage uplift from India year-on-year led by mobile phone and automobile shipments. India is also among our top 3 performing markets in terms of freighter capacity and profitability. We also see the creation of a strong ecosystem supporting logistics and manufacturing in India with construction of new highways. This will lead to more investments and exports from India.

How do you look at normalisation of ties between India and China. How does that benefit Cathay Cargo?

Rajesh: The passenger flights between two countries have resumed and there are freighter operations too. So it is a positive outcome. We also see that trade between India and China has increased and that includes Indian exports. So the normalisation is a good sign and we strongly feel we will have a role to play in supporting trade.

What regulatory challenges do you face in India?

Dominic:  We would like the government to allow our freighters to operate to two Indian airports in a single journey. We operate 13 freighter flights to India per week and each carrying 100 tonnes plus to Chennai, Delhi and Mumbai. We have considerable payload and it is easier to fill them up from Hong Kong. Allowing freighter flights to two airports in a single journey will certainly benefit us and shippers, as it would mean better use of empty capacity. It will also allow us to look at places like Hyderabad, Bengaluru, and Ahmedabad where we are not flying our freighters at the moment.

 Cathay Cargo has invested a lot in technology and digital initiatives. Can you share latest update

Dominic: Digitalisation is a strong focus for us. Earlier this year we became the first airline in the world to roll out IATA ONE Record platform that now gives shippers real time updates on custom clearances from Europe, US, Canada and the UAE. We are also using technology for staff training and efficient screening at our cargo terminal. We have collaborated with Hong Kong University to introduce VR-based training modules for our ground staff. On the commercial side globally 80 per cent of Cathay Cargo shipments are booked online and in India the adoption is over 90 per cent.