Hong Kong cargo woes continue. Hactl and AAT reductions now compounding

Hactl and AAT both reported a slight pick up in demand in Aug-2009, although both companies still expect a full recovery is still a way off. The key indicator, however, will be whether Hong Kong's cargo volumes move up significantly in the pre-Christmas period, after last year's disappointment.

Hactl seeing cargo volumes “picking up gradually” with “milder” contractions in Aug-2009

Hong Kong Air Cargo Terminals Limited (Hactl) stated it is seeing overall cargo volume “picking up gradually”, following “relatively milder” cargo contractions in Aug-2009. However, it should be noted that air cargo volumes started to decline in Jul-2008, so contractions are now compounding.

During Aug-2009, Hactl handled 206,810 tonnes of cargo in the month, for a year-on-reduction of 6.2%. Comparatively, cumulative tonnage in the eight months to Aug-2009 slumped 17.9% to 1.4 million tonnes. 

Export volume in Aug-2009 declined 10.1% to 107,946, once again a less severe contraction compared to Jul-2009’s 13.9% reduction. Aggregate export volume for the first eight months of the year was 725,439 tonnes, down 22.3% compared with the same period last year.

HACTL’s transshipment decline of 8.2% in Aug-2009 was disappointing, following a “clear improvement” in Jul-2009, in which transhipment volumes were down by only 0.6%. In the first eight months of 2009, transhipments were down 9.3% to 304,374 tonnes.

Hactl import volume returns to growth after over 12 months of contractions

Import volume, meanwhile, showed signs of improvement for the first time in over 12 months, with a 4.0% year-on-year increase to 55,973. In the eight-month period, import growth declined by 14.9% to 381,921 tonnes. 

HACTL cargo traffic growth (% change year-on-year): Aug-2008 to Aug-2009

AAT announces (very) slightly improved Aug-2009 traffic

HACTL’s smaller rival, Asia Airfreight Terminal Co Ltd (AAT), handled 43,232 tonnes of cargo in Aug-2009, a 16% contraction, with export cargo decreasing 18% to 28,945 tonnes and import volume down 13%. Transhipment cargo volume was up 27%, although off a small base, to 472 tonnes.

Asia Airfreight Terminal (AAT) cargo traffic growth (% change year-on-year): Aug-2008 to Aug-2009

Outlook: Chill economic winds, with cross-Strait liberalisation a further challenge

While neither HACTL or AAT are currently providing commentary on their traffic results, it is clear that both companies are still feeling the impact of the global economic downturn, in addition to the impact on the Hong Kong hub from cross-Strait liberalisation. 

A snapshot of the challenges facing both companies can also be drawn by comments by the CEO of Hong Kong-based Cathay Pacific, Tony Tyler, who earlier this week stated the carrier is experiencing a “toxic combination” of a collapse in premium and cargo revenues, yields, and the negative impact on demand created by the swine flu outbreak, which has meant that “both our passenger and cargo business have been hammered at the same time". He added, "that makes this a downturn like no other - and the worst thing of all is there is still no end in sight”.  

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