Cathay Pacific Faces Possible Ban From U.S. Routes Due To Hong Kong Quarantine Politics

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Following a complaint by FedEx the U.S. Department of Transportation has put the government of Hong Kong on notice that airlines based in the Special Administrative Region (mainly Cathay Pacific) might be restricted from flying to the U.S. as Hong Kong uses their Covid quarantine regime to disadvantage foreign carriers.

The DOT requests HK based carriers to file flight schedules for all U.S. flights within seven days to determine if any are “contrary to applicable law or adversely affect the public interest.”

Issues started when Hong Kong implemented new, strict rules in January requiring that locally-based air crews observe quarantine when returning to Hong Kong from international locations which has caused havoc for all HKG based airlines including Cathay Pacific but also roughly 200 FedEx cargo pilots as Hong Kong is a major cargo hub for the carrier.

Cargo is pretty much the only money maker these days for airlines and Hong Kong has conveniently exempted flights between Hong Kong and Anchorage, Alaska. One might this innocent until it turns out that Cathay Pacific uses Anchorage as a cargo hub and therefore gaining a clear advantage over the competition.

As Reuters reported today FedEx has filed a complaint with the regular citing the unfair practices and that Hong Kong is abusing it’s quarantine regime.

The U.S. Transportation Department (USDOT) warned it could limit flights by carriers based in Hong Kong after the Asian financial hub imposed quarantine rules that have impacted U.S. cargo carrier FedEx Corp.

USDOT issued an order on Tuesday requiring Hong Kong-based Cathay Pacific Airways Limited to file flight schedules for all U.S. flights within seven days to determine if any are “contrary to applicable law or adversely affect the public interest.” …

The USDOT order was issued in reaction to Hong Kong’s quarantine restrictions that exclusively benefit Hong Kong carriers and “impaired the operating rights of U.S. carriers,” USDOT said.

While FedEx’s Hong Kong-based crews serve only intra-Asia routings and therefore do not benefit from the Anchorage exception, USDOT said, Hong Kong carrier Cathay Pacific operates a large transshipment operation at Anchorage.

“This carve out effectively provides Cathay Pacific with the ability to continue those operations without impact from the new crew quarantine requirements,” said USDOT.

As a result of the quarantine rules, FedEx is incurring “significant operational costs and personal burden on its Hong Kong crewmembers,” the Transportation Department said.

It said FedEx had temporarily relocated its Hong Kong-based crews to San Francisco “in order to maintain the viability of critical operations in its intra-Asia network.” …

In a previously unreported Feb. 26 letter, USDOT urged Hong Kong authorities “to restore the level playing field in the U.S.-Hong Kong market; otherwise, the department may have no choice but to consider regulatory action.”

It’s pretty clear that Hong Kong is just a pawn of Beijing at this point. The restrictions are also a heavy burden on Cathay Pacific passenger operations but the cargo case shows a clear deception on part of the authorities. This is clear abuse of the way the quarantine regime in HK is being handled and without doubt it’s on the behest of China.

The ideal response in this case would be to indeed put pressure on airlines but also to stop differentiating between Hong Kong and mainland China. They are clearly no longer acting as two political entities so it’d be just fair to hold them both liable for the actions of their proxy. The USDOT sanctions should apply to all of their airlines.

Conclusion

Hong Kong based airlines Cathay Pacific and HK Express (the latter not currently operating and U.S. flights) now have to file their flights seven days in advance and these have to be individually approved. Should the DOT play hardball in case Hong Kong doesn’t change it’s policies in respect to FedEx then Cathay Pacific might face the possibility that either one of their flights (passenger & cargo) won’t receive a clearance to operate anymore.

Cathay Pacific is just as well a victim of the political play in Hong Kong as the foreign airlines are. I wouldn’t be surprised if China tries to starve them out and then let Air China take over short after which would be a real shame as I like Cathay Pacific and their First Class service. As such, Hong Kong authorities who are really just puppets at this point likely won’t care much about the DOT intervention and possible consequences. We shall see.

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