Cathay Pacific warned that inflation, supply-chain snags and Covid restrictions in China could lead to weaker cargo demand in this year’s peak season. “Inflation is having an impact on some areas of consumer demand, the supply chain disruption of recent months has dampened manufacturing output, and there continue to be constraints from Covid-19 on the Chinese Mainland,” Frosti Lau, Cathay’s general manager for cargo service delivery, wrote in an email newsletter Thursday. Airfreight has been a rare bright spot for airlines during the pandemic as virus-related travel restrictions suffocated passenger services, particularly in Hong Kong, where Cathay is based. With Hong Kong’s curbs on travel gradually easing, including mandatory hotel quarantine dropping to three nights, Cathay has been resurrecting more of its passenger services. The airline is adding more cargo capacity in the bellies of aircraft, Lau said, while its freighters are operating a full schedule and some passenger aircraft are being used for cargo-only services regionally. “This extra capacity will help as we prepare for a busy peak, although we are anticipating it may not be as sustained and pronounced as last year’s,” Lau wrote. Peak season is the final quarter of the year, with busy holidays such as Christmas. Consumer product launches could still boost demand, Lau said. Cargo accounted for about 75% of Cathay’s revenue in the first half of 2022 as passenger operations remained extremely subdued. <br/>
oneworld
The cash-strapped government of Sri Lanka will go ahead with the partial privatization of its national carrier, SriLankan Airlines. The government plans to sell a 51 percent stake in the airline, as well as 49 percent takes in both its catering and ground-handling units, Sri Lankan aviation minister Nimal Siripala de Silva said on August 29. He said that the government can no longer afford to inject money into loss-making SriLankan as the country suffers from a severe economic crisis. Calling SriLankan a burden on the government treasury, de Silva said the government spends between $80-200b annually on the airline. SriLankan currently has $1.1b in debt, he added. Revenues from the sales could be used to pay off some of those debts. The privatization proposal follows comments by Sri Lanka’s newly-elected prime minister Ranil Wickremesinghe. In his first address to the nation, he proposed a privatization plan for the country’s flag carrier to help generate funds and tackle the economic crisis. A sale by the Sri Lankan government of a majority stake in its namesake airline would be the latest in a series of state-owned airline privatizations. Last year, the Tata Group bought Air India from the country’s government in what many see as a catalyst to revitalize the airline. And in Europe, the Italian government is nearing the sale of a majority stake in ITA Airways to a consortium led by private equity firm Certares that includes Air France-KLM and Delta Air Lines. SriLankan recorded its first profitable fourth quarter since 2006 for the fiscal year that ended on March 31, with a group net profit of $1.7m. The financial turnaround was the result of various measures, including scaling down staff costs and overhead, renegotiating supplier contracts, increasing cargo revenue, and creating an ambitious growth plan that capitalizes on pent-up travel demand. That growth plan sparked opposition from some Sri Lankans in April owing to the country’s dire economic situation.<br/>