Cathay Pacific Airways has lost market share on European cargo routes as freight rates sink on weak demand from the euro zone. The carrier expects the overcapacity problem in the cargo market will only be corrected in the last quarter of the year. “Cathay has lost some market share during the downturn, especially to Europe,” said Cargo Director Nick Rhodes. “If the rates reach a level where we cannot cover our operating costs, we have no choice but to reduce our freight capacity.” Cathay has halved its freighter capacity on European routes to 11 freighters weekly from 21 last year. Overall capacity fell 1.8% in the first half of the year. Rhodes said Cathay was opting to carry high-yield or special cargo, which was still profitable. The disequilibrium would only be corrected in the last quarter when new high-technology products were launched, he said. But as high-tech manufacturing in China is moving inland, products are shipped directly to Europe and the U.S., bypassing Hong Kong, according to Sunny Ho, Executive Director of the Hong Kong Shippers’ Council. Zhengzhou Airport handled 150,000 tons of cargo last year, up nearly 50% on 2011 and is building a dedicated runway for freighter services. Air cargo in southern China, including Hong Kong, had entered a low growth period, said Sunny Yu, Chairman of ASR Holdings, a logistics company. In the first six months, Hong Kong airport posted a 2% growth in cargo tonnage to 2 million tons. Cargo handled by the Shanghai Pudong cargo terminal also saw slower growth of 1.5% in the first half to 604,019 tons as the airport faces the same problem as Hong Kong.