Commentary on Political Economy

Monday 17 January 2022


 ‘Deep trouble’: Cathay Pacific descends further as punitive pandemic worsens

Accusations of staff breaching Covid rules latest in troubled few years for Hong Kong flag carrier

A Cathay Pacific aircraft comes in to land at Hong Kong international airport in August 2021.

A Cathay Pacific aircraft comes in to land at Hong Kong international airport in August 2021. Photograph: Isaac Lawrence/AFP/Getty Images

As Omicron spread to at least 50 people in Hong Kong last week the government looked to one place in particular for blame – the city’s flagship airline, Cathay Pacific. Two crew were accused of breaching their home quarantine, going shopping or meeting friends, and spreading the highly transmissible variant in the city. As numbers rose, infection flow charts were published marking cases with the airline’s brand while the government launched inquiries and threatened legal action. Pro-Beijing figures and state media called for punishment.

The airline had just come off a government ban on flying key international routes, a punishment for carrying Covid-positive passengers. Around the same time the ban was imposed in late December, quarantine rules were tightened after a pilot tested positive, and then again just days later after three crew also did, and then again after the latest incidents.

On Tuesday, Hong Kong’s chief executive, Carrie Lam, described the airline as “a very big noncompliance case” and accused it of sending some crew back to the territory on empty cargo flights to access shorter quarantine periods.

“This has to be put under full investigation, and we will take legal action once we have the full evidence of what wrong they went into,” Lam said.

The accusations are the latest chapter in a troubled few years for Cathay, as it navigated Hong Kong’s Covid-19 measures as well as changing politics. The punitive action against the airline has damaged morale as staff face job requirements unheard of just three years ago. Last year, Cathay staff spent a total of 200 years – 76,000 nights – in hotel quarantine or in Hong Kong’s government facility at Penny’s Bay.

The whole aviation industry suffered when international travel plummeted in 2020 and 2021, but Cathay was uniquely vulnerable with no domestic market to fall back on. Flights between Hong Kong and London were cut from five to at most one a day. The airline pivoted to cargo but that too suffered. Cathy reported a $2.8bn (£2bn) loss in 2020 and cut thousands of jobs, despite receiving a $5bn government bailout in June of that year. A $972m loss was reported in the first six months of 2021.

Cathay had already found its way into the government’s bad books in mid-2019, when it refused to sanction any staff who participated in the pro-democracy protests. In August that year, the Chinese civil aviation authority banned Cathay crew members who had protested from staffing flights in or out of mainland China. After a management change, at least 26 staff who participated in the protests were later reportedly fired.

A busy airport to just 165 passengers

“It’s quite obvious that the flag carrier for Hong Kong is in deep trouble,” said Frederik Gollob, the chair of the European chamber of commerce in Hong Kong. “Cathay is of course a corporate company but has also had a social function for Hong Kong for decades.

“It’s certainly not a great sign seeing almost all flight activity for passenger flights [drop] and the significantly reduced capacity on the cargo side happening at the moment, as a result of very strict regulations for Covid-19.

“We’re extremely thankful to all the Cathay crew and the company for doing everything they can to keep us connected to the outside world and keeping up goods flow. Also the international carriers who do the same.”

A woman walks past empty counters of Cathay Pacific at Hong Kong international airport in January 2022.

A woman walks past empty counters of Cathay Pacific at Hong Kong international airport in January 2022. Photograph: Lam Yik/Reuters

Hong Kong’s pandemic border restrictions are among the strictest in the world, with bans on flights from seven countries and transit passengers from another 140. On a single day last week, just 165 people flew into what was once one of the world’s 10 busiest airports.

Arrivals must go into 21 days of expensive quarantine, while thousands of close contacts are also forced into government quarantine at Penny’s Bay. After the Omicron outbreak the centres this week reached breaking point, with reports of power outages, food shortages and people confined for longer than ordered because staff were too overrun to release them.

Deflecting attention

The breaches by crew were serious, but observers have also noted the pressure on Cathay appeared to grow as the government faced scrutiny on legislators who were also accused of breaching guidelines on avoiding large gatherings. Dozens of legislators were sent to Penny’s Bay after they attended a birthday party with a suspected case, including the pro-Beijing firebrand Junius Ho, who took to social media to rail against the government’s system having finally experienced it for himself.

Questioned about the comparison, Lam distanced herself from taking responsibility for subordinates despite demanding Cathay’s senior management to do so days earlier.

Cathay has said it will cooperate with both inquiries, and apologised for the “disruption and anguish” for the “unacceptable noncompliance” by the crew members, who have reportedly been fired. But the airline’s chair, Patrick Healy, said the alleged breaches overshadow the overwhelming majority who had been professional under “incredibly challenging conditions”.

The rules for airline crews in Hong Kong have changed frequently, especially in the last month. Tightened quarantine rules have led to staff shortages, flight cancellations and the suspension of cargo services – the one arm still making money.

On Christmas Day last year, 25 imported cases of coronavirus were found – Korean Air, Emirates and Cathay were banned from running particular routes. Also in December the government ordered flights operating in and out of mainland China could only be staffed by crew from a “closed loop” of flights and hotel quarantines for consecutive weeks before heading home after another fortnight in quarantine.

“The crew who joined that are literally just travelling from hotel to aircraft, aircraft to hotel for months,” said Grace Siu, the external vice-chair for the airline’s flight attendants union.

When the rules changed after the breach, there was little notice for staff, she said.

“Many of us were not in Hong Kong, we were outside the city or in flight, and got the message that we have to go to the hotel to do quarantine and not home.”

Siu said the union did not have data on staff who have left, but it does field plenty of queries from struggling members. She said most staff had complied with rules that have taken an enormous toll, as they have done on flight crews globally, adding that the crackdown over a couple of breaches had hit hard.

“Of course it affects the whole crew’s morale,” Sui said.

Earlier this month the airline union posted a meme to its Facebook page. In the retro illustration styled as a 1950s holiday scene, a young snorkel-wearing boy gives a thumbs up from the mouth of a great white shark. Below the image says: “Stay Positive!”

Further restrictions

On 31 December, Andy Wong, the general manager of corporate affairs at Cathay, said further restrictions would lead to dramatic disruptions to the supply chain, and could lead to reductions in flights in order to protect crew and maintain general safety.

On Tuesday Lam told people to prepare for higher prices and item shortages because of the new rules, but that the city had no choice if they were to fight the outbreak.

Gollob said the international business community had raised their concerns with government last year, but the continuing crisis worried them. It is increasingly difficult to maintain a life in Hong Kong with family abroad, or to attract staff to the city – including airline crews for either a permanent stationing or simply manning a flight that could end with them in Penny’s Bay for weeks.

“I feel that the international community has been extremely resilient in those two years but energy levels are, I would say, close to zero, and it’s increasingly hard to maintain the status quo,” he said.

In a video message to staff, Healy thanked them for their sacrifices during the pandemic, including extended time separated from family.

“What you have been through during the past two years is quite simply unparalleled.”

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