Embattled Cathay Pacific face trouble on a fresh front. Well-connected local upstart airline, Greater Bay Airlines is eyeing a large aircraft order to set itself up as a serious regional competitor to Cathay Pacific. The cards are falling Greater Bay's way while Cathay Pacific cannot currently cut a break.
Winds of fortune blowing Greater Bay's way
According to a Bloomberg report, Greater Bay Airlines is eyeing ordering up to 30 narrowbody jets with the Airbus A321neo and Boeing 737 MAX 10 on the shortlist. Bloomberg says the order would be worth up to US$1.77 billion. The media outlet cites a person with "direct knowledge of the plan."
Greater Bay Airlines wants to fly to over 100 regional destinations around Asia and China. It has a single leased Boeing 737-eight jet and an air operator's certificate to fly charter and cargo flights. The airline is still awaiting a license to fly scheduled passenger services.
Greater Bay Airlines also has Bill Wong Cho-bau, a Hong Kong-based property tycoon who is spending billions to set up the airline. Mr Wong also owns Shenzhen-based Donghai Airlines and is a member of the Chinese People’s Political Consultative Conference, a key Chinese Government political advisory body.
That kind of CV might help explain why good luck follows Mr Wong and his airline ventures. It might also help explain why Greater Bay Airlines could be allowed to challenge Cathay Pacific's primacy in Hong Kong down the track.
The pain intensifies for Cathay Pacific
Cathay Pacific isn't the only flag carrier in Asia in a world of pain. Singapore Airlines, Malaysia Airlines, Thai Airways, Vietnam Airlines are all regional competitors under financial pressure. However, unlike Cathay Pacific, those airlines enjoy a degree of state ownership and backing.
In contrast, privately-owned Cathay Pacific is at the receiving end of continuing ire from the Chinese Government. Skirmishes date back to when Cathay Pacific employees participated in pro-democracy rallies.
More recently, issues with Cathay Pacific crews circumventing Hong Kong's tough quarantine rules caused massive ructions in Beijing and Hong Kong. Cathay's Pacific's Chairman, Patrick Healy, publicly apologized.
Days ago, Hong Kong Police arrested two former Cathay Pacific flight attendants. The Police charged them with breaching Hong Kong’s prevention and control of disease regulations. The offense carries a maximum penalty of six months imprisonment and/or a USS650 fine.
After breaching the quarantine protocols, both flight attendants tested positive for omicron as a wave of the virus swept Hong Kong. Aided by pro-Beijing media, Hong Kong and Beijing authorities sheeted home much of the blame to Cathay Pacific.
Greater Bay Airlines positioning to benefit
Hong Kong was once one of the world's busiest passenger and transit airports and Cathay Pacific its buoyant marque airline. Numbers have since declined. According to The Guardian newspaper, on one day last week, just 165 people flew into Hong Kong.
In the same week, Hong Kong’s chief executive, Carrie Lam, called Cathay Pacific “a very big noncompliance case." At the same time, influential pro-Beijing figures called for increased punitive action against Cathay Pacific.
Yesterday, Cathay Pacific announced a further tightening of aircrew quarantine measures, and flight bans from certain destinations have been imposed by the Hong Kong Government.
The airline is flying to 26 destinations over January, but in many cases only once or twice a month. Cathay Pacific warns of further changes to its schedules over the next few months.
While Cathay Pacific reels, Mr Wong's embryonic airline is positioning nicely to benefit when travel in the region does finally start to normalize.
Given Bill Wong's Beijing connections, could Greater Bay Airlines be warming up to replace Cathay Pacific should the travel bans continue indefinitely and the once-mighty airline finally collapse? After all, the Chinese Government has no skin in Cathay Pacific and plenty of antipathy towards it.
It's a tantalizing glimpse into the possible medium-term future of commercial aviation in Hong Kong.