Cathay Pacific has announced the signing of an offtake agreement with Aemetis for the supply of 38 million US gallons of blended Sustainable Aviation Fuel (SAF) to be delivered over seven years beginning in 2025 from San Francisco International Airport. The SAF purchased can reduce more than 80,000 tonnes of lifecycle carbon emissions, equivalent to the amount of carbon sequestered by more than 1.3 million tree seedlings grown for 10 years. The agreement is also part of the joint procurement initiative for SAF by the oneworld alliance, of which Cathay Pacific is a founding member.

The blended SAF to be supplied under this agreement is 40% SAF and 60% Petroleum Jet A-1 fuel to meet international blending standards. The SAF will be produced at the Aemetis Carbon Zero plant currently under development in Riverbank, California. The facility will use waste wood to produce cellulosic hydrogen, and combine it with wastes and non-edible sustainable oils. It will then be converted into SAF using carbon-neutral hydroelectricity.  It is scheduled to begin deliveries to Cathay Pacific in 2025.

SAF provides significant environmental benefits compared to petroleum jet fuel, including up to 100% reduction in greenhouse gas emissions on a lifecycle basis, depending on the technology used.  It is a vital solution in the decarbonisation of aviation over the next few decades, especially for long-haul flights.

Cathay Pacific continues to pioneer the aviation industry’s transition towards the substantial use of SAF especially in supporting SAF development and deployment in Asia.

In other news, Cathay Pacific has also released its traffic figures for August 2022. The airline’s traffic figures continued to reflect the positive impact of further adjustments to the Hong Kong Special Administrative Region Government’s travel restrictions and quarantine requirements, notably the mandatory hotel quarantine arrangement for inbound travellers.

Cathay Pacific carried a total of 253,907 passengers last month, an increase of 87.6% compared to August 2021, but a 91.3% decrease compared to the pre-pandemic level in August 2019. The month’s revenue passenger kilometres (RPKs) increased 82.7% year-on-year, but were down 86.1% versus August 2019. Passenger load factor increased by 22.2 percentage points to 68.6%, while capacity, measured in available seat kilometres (ASKs), increased by 23.5% year-on-year, but decreased by 83.8% compared with August 2019 levels. In the first eight months of 2022, the number of passengers carried increased by 133.5% against a 1.6% increase in capacity and a 141.9% increase in RPKs, as compared to the same period for 2021.

The airline carried 104,851 tonnes of cargo last month, a decrease of 15.6% compared to August 2021, and a 35% decrease compared with the same period in 2019. The month’s cargo revenue tonne kilometres (RFTKs) decreased 23.3% year-on-year, and were down 35.1% compared to August 2019. The cargo load factor decreased by 10.7 percentage points to 67%, while capacity, measured in available cargo tonne kilometres (AFTKs), was down by 11.1% year-on-year, and was down by 41.1% versus August 2019. In the first eight months of 2022, the tonnage decreased by 8% against a 25.4% drop in capacity and a 32.4% decrease in RFTKs, as compared to the same period for 2021.

Travel

Chief Customer and Commercial Officer Ronald Lam said: “We continued to see improved performance in our travel business in August. Average daily passenger numbers further increased month on month and exceeded 8,000. Passenger flight capacity increased 28% compared with July, although we still only operated about 16% of pre-pandemic levels. Meanwhile, load factor remained high at close to 69%.

“Following the Hong Kong SAR Government’s adjustment to the hotel quarantine arrangement for travellers entering Hong Kong from 12 August, we observed an increase in inbound traffic to our home hub. This was particularly so for long-haul traffic from the US, Canada and Europe. Meanwhile, our passenger flight capacity to the Chinese Mainland remained restricted, although we were able to resume carrying passengers to Zhengzhou, Qingdao and Xiamen in August.

“Student traffic from the Chinese Mainland to the US represented a significant portion of our passenger traffic last month. On top of our existing services to New York, Los Angeles and San Francisco, we resumed flights to Chicago and Boston in August for the first time this year to cater to the strong demand. As a result, our US-bound flights managed 80% load factors. Apart from student traffic, our US routes were also boosted in the other direction by transit traffic travelling to Southeast Asia, the result of greater connectivity from increased flight frequency.

Cargo

“In terms of cargo, we operated a full freighter schedule in August, which was supported by increased passenger flights as well as regional cargo-only passenger flights. While our overall cargo flight capacity was down 11% compared with the same period last year, this was because we operated a significant number of long-haul cargo-only passenger flights at that time. Overall, we operated 59% of our pre-pandemic cargo flight capacity in August. Demand has remained flat throughout the summer months, but we have continued to make all preparations to ensure smooth operations as we step into the cargo peak season.

“Supporting the Cathay Pacific Group’s net-zero carbon emissions by 2050 target, we have extended our carbon-offset programme, Fly Greener, to our air cargo services. The programme not only enables our cargo customers to calculate the carbon emissions for their shipments, but also allows them to purchase carbon offsets to support carbon-offset projects. All selected projects are certified by the internationally recognised non-profit organisation, Gold Standard, to ensure their carbon reductions and societal benefits are verified to have met their standards.

“Furthermore, in an ongoing effort to improve the quality of our service delivery, we have introduced two new Cargo iQ milestone measurements – freight out of warehouse (FOW) and freight into warehouse (FIW). These additional milestones will bring greater transparency to the overall shipment journey, and are now operational at the Cathay Pacific Cargo Terminal in Hong Kong, with plans in place to roll them out across our network in the near future.

Outlook

”Looking ahead, we welcome the Hong Kong SAR Government’s adjustments to the mandatory quarantine arrangements for locally based aircrew arriving in Hong Kong earlier this month. While we will continue to add back more flights as quickly as is feasible to strengthen the network connectivity of the Hong Kong aviation hub, this will still take time as we build operational readiness and undertake a substantial amount of training and aircraft reactivation.

“This, combined with other operational complexities, means that capacity can only be increased gradually over a period of several months. As such, we are now projecting by the end of the year to be able to operate about one-third of our pre-pandemic passenger flight capacity – about double the passenger flight capacity we operated in August – and about two-thirds of our pre-pandemic cargo flight capacity. As the market and operating conditions further improve moving forward, we will aim to add back more flights where feasible.

“On the travel side, we expect that demand will remain solid going into the fourth quarter. Transit traffic between the Americas and Southeast Asia and India is anticipated to be strong, while traffic between Australia, New Zealand and other parts of our network is also expected to increase.

“As more regional destinations such as Japan continue to adjust their inbound travel policies, we will continue to monitor demand and adjust our passenger flight capacity accordingly. We intend to add about 200 pairs of passenger flights in October, primarily to regional destinations such as Osaka, Seoul (Incheon), Bangkok, Kuala Lumpur and Manila, and also to long-haul destinations such as Vancouver, Sydney and Melbourne.

“Regarding cargo, whilst the anti-pandemic measures in the Chinese Mainland may affect supply chains, it has been encouraging to see New Product Introduction (NPI) shipments begin in September, which bodes well for the expected solid peak season. As a result, we will continue to maximise freighter capacity, supported by increased passenger services and regional cargo-only passenger flights.”

The full August figures and glossary are on the following pages.

Cathay Pacific aircraft photo gallery: