Cathay Pacific Fights Government Travel Restrictions –


Cathay Pacific is fighting against government travel restrictions

Cathay Pacific has revealed that it is not out of the woods as the global aviation industry experiences a gradual recovery.

Hong Kong’s flag carrier released December traffic figures, carrying 92,916 passengers, an increase of 130.6% over the same period last year. However, this was a decrease of nearly 97% from pre-Covid levels in 2019. The passenger load factor was 36.6%.

Additionally, the carrier said it only carried 717,059 passengers in 2021 – due to travel restrictions and strict quarantine measures. The carrier carried 4.6 million passengers in 2020 and 35.2 million in 2019 respectively.

The airline said it carried 1.3 million tonnes of cargo in 2021, a figure similar to last year. The airline transported 2 million tons in 2019.

According to the troubled airline, it reduced operating cash burn by between HK$2.5 billion and HK$3 billion ($321 million and $385 million) in the first half of 2020 until marginal cash generation in the second half of 2021.

Meanwhile, Hong Kong is dealing with the fifth wave of the coronavirus – recording more than a hundred cases every day recently. Earlier, the Hong Kong government tightened its quarantine requirements and travel restrictions.

The restrictions will have a significant impact on the airline. In January, Cathay Pacific Cargo was providing only 20% of its pre-Covid capacity, and passenger flights were reduced to around 2% of their pre-Covid levels. The airline expected this to result in an operating cash burn of HK$1 billion – to HK$1.5 billion a month from February.

Cathay Pacific expects flights to China to remain largely unchanged, but capacity to the rest of the network will be reduced in response to the measures. However, Hong Kong Express – its low-cost carrier – maintains connectivity with some regional destinations.

The carrier will operate freighter services to China and a daily freighter operation to North America. Meanwhile, the airline operates passenger aircraft to transport cargo to Europe and the South West Pacific. Cathay Pacific is trying to maximize its capacity to operate 5% more cargo flights.

Hong Kong has no sign of lifting travel restrictions, with most travelers from overseas required to quarantine for 21 days. The government is implementing a zero-Covid policy, insisting that “living with Covid” is not an option.

Hong Kong implements the “location and flight specific suspension mechanism”. Under the restriction, if a total of five or more passengers across all flights originating from the same location, regardless of airline, have been confirmed positive by testing or a relevant viral mutation within a week, the airline will be banned from entering Hong Kong for two weeks.

Earlier, Akbar Al Baker, CEO of Qatar Airways, thought politics was “killing” Cathay Pacific. Qatar Airways owns nearly 10% of Cathay Pacific.

“You can’t just shut down the aviation industry because someone got infected from coming on someone’s plane,” Baker said, regarding the policy.

Meanwhile, although Hong Kong’s aviation industry is still facing severe turbulence, stakeholders are constantly expanding its business and infrastructure. Earlier, Hong Kong International Airport revealed that construction of a third runway is underway and expected to be completed in 2024. Additionally, Greater Bay Airlines – Hong Kong’s newest airline – expects to until an air transport license is granted by the government in early 2022.

  • Will has been a travel agent in Hong Kong for almost three decades. Over time, he has not lost his passion for his work. He still has great enthusiasm for the airline industry and airport operations.

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Will Lee

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