Cathay Pacific Airways : November 2019 Traffic Figures

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CATHAY PACIFIC AIRWAYS LIMITED

國泰航空有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 293)

November 2019 Traffic Figures

The appended press release contains combined traffic figures for November 2019 for Cathay Pacific Airways Limited ("Cathay Pacific") and its wholly owned subsidiary, Hong Kong Dragon Airlines Limited ("Cathay Dragon"). The information in the press release may be price sensitive. This announcement containing the press release is accordingly being issued pursuant to Part XIVA of the Securities and Futures Ordinance. The information in the press release has been prepared on the basis of internal management records. It has not been audited or reviewed by external auditors.

This announcement is issued by Cathay Pacific pursuant to Part XIVA of the Securities and Futures Ordinance.

The information in this announcement has been prepared on the basis of internal management records. It has not been audited or reviewed by external auditors.

Investors are advised to exercise caution in dealing in shares of Cathay Pacific.

As at the date of this announcement, the Directors of Cathay Pacific are:

Executive Directors: Patrick Healy (Chairman), Gregory Hughes, Ronald Lam, Martin Murray, Augustus Tang;

Non-Executive Directors: Cai Jianjiang, Ivan Chu, Michelle Low, Song Zhiyong, Merlin Swire, Samuel Swire, Xiao Feng, Zhao Xiaohang;

Independent Non-Executive Directors: Bernard Chan, John Harrison, Robert Milton and Andrew Tung.

By Order of the Board

Cathay Pacific Airways Limited

David Fu

Company Secretary

Hong Kong, 17th December 2019

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17 December 2019

FOR IMMEDIATE RELEASE

CATHAY PACIFIC RELEASES COMBINED TRAFFIC FIGURES

FOR NOVEMBER 2019

The Cathay Pacific Group today released combined Cathay Pacific and Cathay Dragon traffic figures for November 2019 that show decreases in the number of passengers carried and the amount of cargo and mail uplifted compared to the same month in 2018.

Cathay Pacific and Cathay Dragon carried a total of 2,623,764 passengers last month - a drop of 9.0% compared to November 2018. Passenger load factor decreased by 3.2 percentage points to 80.1%, while capacity, measured in available seat kilometres (ASKs), decreased by 1.5%. In the first 11 months of 2019, the number of passengers carried dropped by 0.4% and capacity increased by 5.7%, as compared to the same period for 2018.

The two airlines carried 177,964 tonnes of cargo and mail last month, a drop of 3.9% compared to the same month last year. The cargo and mail load factor fell by 1.5 percentage points to 68.6%. Capacity, measured in available freight tonne kilometres (AFTKs), was down by 3.8% while cargo and mail revenue freight tonne kilometres (RFTKs) dropped by 5.8%. In the first 11 months of 2019, the tonnage fell by 6.4% against no change in capacity and a 6.8% decrease in RFTKs, as compared to the same period for 2018.

Cathay Pacific Group Chief Customer and Commercial Officer Ronald Lam said: "As with the past few months, November continued to be very challenging for both Cathay Pacific and Hong Kong, with sentiment for travel still weak. In November, our inbound Hong Kong traffic dropped 46% compared to the same period in 2018 - a further slowdown from the 35% drop seen in October. Outbound Hong Kong traffic, meanwhile, was down 8% against the same time last year - a slight improvement over previous months. Overall, passenger load factor dropped 3.2 percentage points to 80.1%. Our increasing reliance on transit Hong Kong traffic, which has been less impacted, together with intense competition has meant overall yield remained under significant pressure.

"Our regional routes, in particular mainland China and Northeast Asia, continue to experience weak demand for travel into Hong Kong. Travel sentiment was also soft on routes to and from the US before Thanksgiving week - traditionally a very strong period for premium class travel. There were a few bright spots in our network, such as our India routes, which remained robust and generated good demand between India and North America. Traffic between Europe and the Southwest Pacific - an important transit passenger stream for our network - also remained healthy.

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"Looking forward, we continue to see a significant shortfall in inbound Hong Kong advance bookings, particularly from mainland China and other regional markets, as compared to the same snapshot last year. This shortfall has been partially offset by the improvement of transit passenger traffic.

"As for our cargo business, both load factor and yield further improved against the previous month in November, which is traditionally a peak month of the year. Exports from mainland China, Hong Kong and Taiwan remained robust. As demand from traditional retail and new product releases tailed off towards the latter half of the month, strong e-commerce traffic surged around the Singles' Day shopping holiday in mainland China as well as Black Friday, to which we successfully catered with additional charter requests to Southeast Asia.

"While our cargo performance this year remains significantly below the record levels seen in 2018, we are cautiously optimistic about 2020 despite anticipating a weak first half. In our continual efforts to drive the competitiveness of the Hong Kong cargo hub, we were pleased to have announced the introduction of a new Terminal Charge concession for export shipments from Hong Kong, which will take effect from 1 April 2020 and make Cathay Pacific and Hong Kong an even more compelling choice for our cargo customers.

"Overall, our expectation is that the rest of 2019 will remain incredibly challenging and we continue to expect our second-half financial results to be significantly below those of our first half. As a business we continue to closely monitor market sentiment and global travel trends, remaining agile in our operations and ensuring our passenger and cargo capacity is best aligned with demand. In light of the immediate commercial challenges we are facing, we have reluctantly made the decision to reduce our seat capacity in 2020 by 1.4% year-on-year as opposed to our original plan of 3.1% growth, meaning that for the first time in a long while our airlines will reduce in size.

"Nevertheless, we remain committed to our customers and our service offering, and will continue to invest in our customer experience proposition, which already this year has seen the launch of new soft products and dining services in our First and Business Class cabins, a greatly expanded in-flight entertainment experience, creative new collaborative menus in our Economy Class cabins, a revamp of our Shanghai Pudong Lounge and the return of our popular Betsy Beer, among other things. All these investments are designed to ensure our customers have more reasons to choose to fly with Cathay Pacific."

The full November figures are on the next page.

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CATHAY PACIFIC /			NOV	% Change	Cumulative	%
CATHAY DRAGON						Change
COMBINED TRAFFIC
			2019	VS NOV 2018	NOV 2019	YTD
RPK (000)
- Mainland China			529,688	-26.2%	7,676,710	-9.8%
- North East Asia			1,202,937	-9.0%	14,811,052	0.4%
- South East Asia			1,423,413	-4.7%	15,816,690	0.1%
- South Asia, Middle East	&		892,478	4.8%	9,493,663	6.7%
Africa
- South West Pacific			1,208,388	-2.3%	14,326,130	4.4%
- North America			2,630,637	-7.4%	32,982,815	3.5%
- Europe			2,047,448	1.3%	27,568,017	8.6%
RPK Total (000)			9,934,989	-5.3%	122,675,077	3.2%
Passengers carried			2,623,764	-9.0%	32,238,301	-0.4%
Cargo and mail revenue tonne		998,641	-5.8%	10,331,553	-6.8%
km (000)
Cargo and mail carried (000kg)		177,964	-3.9%	1,843,985	-6.4%
Number of flights			6,227	-5.8%	74,532	-0.1%
CATHAY PACIFIC /			NOV	% Change	Cumulative	%
CATHAY DRAGON						Change
COMBINED CAPACITY
			2019	VS NOV 2018	NOV 2019	YTD
ASK (000)
- Mainland China			851,846	-12.8%	10,483,083	-3.5%
- North East Asia			1,533,536	-1.3%	18,868,583	5.3%
- South East Asia			1,751,468	0.3%	19,551,433	2.6%
- South Asia, Middle East	&		1,121,251	6.6%	11,605,310	7.2%
Africa
- South West Pacific			1,464,751	1.4%	16,872,347	1.6%
- North America			3,160,764	-4.8%	40,041,711	9.0%
- Europe			2,525,958	1.1%	32,026,133	9.1%
ASK Total (000)			12,409,574	-1.5%	149,448,600	5.7%
Passenger load factor			80.1%	-3.2pt	82.1%	-2.0pt
Available cargo/mail tonne km		1,455,051	-3.8%	16,081,810	0.0%
(000)
Cargo and mail load factor			68.6%	-1.5pt	64.2%	-4.7pt
ATK (000)			2,634,740	-2.8%	30,289,581	2.6%
Media Contact:
Email:[e-mail]	Tel: [phone]

Cathay Pacific website: www.cathaypacific.com

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Glossary

Terms:

Available seat kilometres ("ASK")

Passenger seat capacity, measured in seats available for the carriage of passengers on each sector multiplied by the sector distance.

Available tonne kilometres ("ATK")

Overall capacity measured in tonnes available for the carriage of passengers, excess baggage, cargo and mail on each sector multiplied by the sector distance.

Available cargo/mail tonne kilometres

Cargo capacity measured in tonnes available for the carriage of cargo and mail on each sector multiplied by the sector distance.

Revenue passenger kilometres ("RPK")

Number of passengers carried on each sector multiplied by the sector distance.

Cargo and Mail revenue tonne kilometres

Traffic volume, measured in load tonnes from the carriage of cargo and mail on each sector multiplied by the sector distance.

Ratio:

Revenue passenger kilometres/

Cargo and mail revenue tonne kilometres

Passenger/Cargo and mail load factor = ----------------------------------------------------

Available seat kilometres/

Available cargo and mail tonne kilometres

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