What’s Going on at Cathay Pacific?
Jeff Edwards September 13, 2019
Hong Kong-based Cathay Pacific is eliminating flights and has announced a hiring freeze in response to a sharp decline in passenger traffic as months of anti-government protests, general strikes and sometimes violent clashes with police show no signs of abating. The news follows a report that tourism to the Special Administrative Region of China has dropped by nearly 40%.
Cathay Pacific has repeatedly found itself caught in the middle of tensions between government officials and anti-government protesters in recent weeks. Several of the airline’s top executives have abruptly resigned (including former CEO Rupert Hogg, who reportedly quit rather than provide Beijing with the identities of employees believed to have participated in protests or strikes). Hong Kong International Airport (HKG), Cathay’s base of operations, has increasingly become a focus of protesters who have caused countless disruptions to passengers and flights. The airport was even ordered closed twice in September. More recently, airline officials have taken a hardline position, warning employees they could be fired for supporting protests and even encouraging co-workers to tattle on each other.
Now, the South China Morning Post reports that, coupled with a sharp decrease in travel to Hong Kong, the conflicts are taking a serious toll on business at the flag carrier. On Thursday, the airline announced it would be suspending a number of long-haul international routes as well as several short haul-flights to mainland China and cutting service to dozens of other destinations. At the same time, the company says it will implement a spending and hiring freeze until market and political conditions improve.
After reporting a 38% decline in HKG-bound passenger traffic last month, Cathay officials say the carrier will suspend service between HKG and Dublin Airport (DUB), as well as the HKG/Medan Kualanamu International Airport (KNO) route. The airline will also reduce service to destinations, including John F. Kennedy International Airport (JFK), Frankfurt Airport (FRA), Paris Charles de Gaulle Airport (CDG), Washington Dulles International Airport (IAD) and Vancouver International Airport (YVR). According to the report, additional cutbacks focused on mainland China service are expected in the coming days.
Although Cathay is bearing the brunt of the political situation in Hong Kong, other carriers are not immune to fallout from the unrest. In August, United Airlines quietly suspended service between Chicago O’Hare International Airport (ORD) and HKG in response to the increasingly uncertain market conditions.
[Featured Image: Cathay Pacific]
So with the drop in traffic, Cathay yet charges a premium for its services. I'm on its mailing list and continually amused by its promotional offers of 40% discount on business class tickets for $6,000 +. Really... in which universe...I ask myself...
China needs to be ended and reflagged asap. Waiting like Chamberlain waited on Germany to come to the table before WW2 will only exacerbate the situation.. those who don’t learn from history are destined to repeat it
@MHG You would not know integrity if it slapped you in the face! AND, if Beijing escalates the hostilities, expect the world to increase pressure. Hong Kong was promised 2 systems for 50 years. Instead it has been a constantly more control. Wait until Beijing pulls this stuff in Taiwan. Then you will see world intervention!
I am cofident that Rupert Hogg made the right decision. Cathay is under extreme political pressure and - of course - replaced him with someone willing to abide with any demands from Beijing ... Hong Kong in general and CX in particular are on a down path now until Beijing steps back (very unlikely under the current political setup in China). I´d rather expect further steps in order to increase Beijing´s influence in HK. CX is just a prominent example.