The long-running anti-government protests in Hong Kong are starting to impact on Cathay Pacific. The Hong Kong-based carrier is feeling the heat on several fronts. Bookings are falling, the mainland Chinese Government is applying pressure, and many of the airline’s staff are involved in the anti-government protests.
It is putting Cathay Pacific into a quandary. At a press conference last week, Cathay Pacific’s Chairman, John Slosar, said;
“We certainly wouldn’t dream of telling them (employees) what they have to think about something. They’re all adults, they’re all service professionals. We respect them greatly.”
China wants the identification details of Cathay employees protesting
The mainland Chinese Government is less sanguine. China’s aviation regulator, the Civil Aviation Administration of China (CAAC), is requiring Cathay Pacific to hand over the identification details of all crew flying into Chinese cities on Cathay Pacific. Employees identified as participating in the protests will not be allowed to land in China.
Reuters is reporting that Cathay Pacific is complying with the Chinese government’s demands. In a staff memo, Cathay Pacific CEO, Rupert Hogg, said staff supporting the protests would not be flying into Chinese airspace effective midnight, August 10, 2019.
Reuters reports that Mr. Hogg called the protests ‘illegal, violent, and radical’.
“Cathay Pacific Group employees who support or take part in illegal protests, violent actions, or overly radical behavior shall be immediately suspended from any activity involving flights to the mainland.”
The reaction of the Chinese Government and the pressure it is placing on companies that do business in mainland China is telling. Cathay Pacific has little choice but to comply. Its second-largest shareholder is the Chinese state-run carrier Air China.
Cathay Pacific flies to 24 mainland Chinese cities and those flights make up over a fifth of all its flights. The South China Morning Post reports that China and Hong Kong produced more than half of Cathay Pacific’s revenue in 2018 – HK$57 billion out of HK$111 billion.
The Chinese Government could do immense damage to Cathay Pacific, an airline that has only just begun to turn itself around after several years of financial strife.
In the staff memo, Rupert Hogg said;
“Cathay Pacific Group’s operations in mainland China are key to our business.”
With so much as stake, it seems likely the airline will be fully compliant with Chinese Government demands.
Reports have also emerged that Cathay Pacific suspended a pilot in July who was charged with rioting during the protests. Reuters notes the pilot hadn’t flown since mid-July and was officially suspended from all flying on July 30, 2019.
The impact of the protests on the airlines
The long-running anti-government protests are starting to have a big impact on airlines flying into Hong Kong. While other airlines can reduce capacity and suspend services, Cathay Pacific is Hong Kong airport dependant.
Cathay Pacific has been forced to cancel flights as protests began to gridlock the city and airport. It is estimated more than 2,300 Cathay employees joined the protests, including some 1,200 pilots and crew. If those figures are correct, that’s a huge logistical headache for Cathay Pacific if the Chinese Government holds fast and refuses them entry into Chinese airspace.
The United States Government has issued a travel warning to its citizens.
The South China Morning Post is reporting that the airline has suffered a double-digit fall in ticket sales for travel in the medium term – mostly due to unrest. It notes the fall is mainly in economy class, suggesting that premium class corporate travel is holding firm for the time being.
The immediate future in Hong Kong, the response of the mainland Chinese Government, and the willingness of people to travel to Hong Kong while unrest continues poses a challenge for all airlines flying into Hong Kong, but most particularly, for Cathay Pacific.
Simple Flying requested a comment from Cathay Pacific regarding its stance on employees who protested but had received no response prior to publication.