Cathay Pacific announced earnings earlier this week which paint a fairly ominous picture for China. The airline posted a 9.3% YoY drop in revenue and an 82% decline in net profit which they attributed to, among other things, "weak passenger demand, particularly in the premium class". Comments from the Cathay's press release clearly indicate weak corporate travel with the company pointing out that corporate enplanements in Hong Kong declined for the first time since 2009:

The slowdown in the Mainland China economy and economic fragility elsewhere caused restrictions to be placed on corporate travel . This adversely affected premium class demand, particularly on long-haul routes.

elsewhere caused . This adversely affected premium class demand, particularly on long-haul routes. Yield was further affected by strong competition, adverse currency movements and a significant reduction in premium corporate travel .

. Demand for travel originating from Hong Kong was strong in the first two months of the year, but weakened thereafter. Corporate travel originating in Hong Kong was well below expectations , particularly to London and New York. Numbers traveling declined for the first time since 2009 , when business was affected by the financial crisis.

, particularly to London and New York. , when business was affected by the financial crisis. Tourism from Mainland China to Hong Kong is weak.

A couple of tables from Cathay's earnings presentation help sum up the story.

Passenger yields tanked in 1H16 on lower corporate travel:

Marking the lowest yields since 2009:

While cargo yields plunged through 2009 levels...

Unfortunately, Chairman John Slosar doesn't expect things to improve in the back half of 2016:

We expect the operating environment in the second half of the year to continue to be impacted by the same adverse factors as in the first half. The overall business outlook therefore remains challenging. We expect passenger yield to remain under pressure. Overcapacity and economic fragility will dampen cargo demand. We will also continue to be vigilant on costs.

Meanwhile, the company's earnings presentation noted the following for 2H16 outlook:

The challenging business environment is expected to continue .

. Yields are expected to continue to be under intense pressure.

are expected to continue to be Lower Hong Kong traffic with more 6th Freedom travel.

with more 6th Freedom travel. The cargo business will continue to be adversely affected by overcapacity and economic fragility.

And, of course, Mr. Market was not happy...